Yes, sorry about that.

Unfortunately the cynical, jokular side of my brain that takes 2 seconds to write posts does not often talk to the contemplative, analytical and research-orinted side which takes 2 hours to write them which is why I had to go away and check which one to believe in this case.

The ghost of the 2014 consolidation likes to haunt my sense of reality on a regular basis. Scarred for life after spending 18 months thinking "ok, this is the bottom". However, it would appear there is at least some logic to it after all that says things are indeed "the same but different this time"

Look folks, just put all background noise about tether, India guv, Roubini FUD and other distractions out of your minds.

Here's what's going on. The correction is technical, pure and simple.

If you checkout this chart from 2015/2016/17, you can see that bitcoin grows in these 8-monthly bubbles which burst in the "propellor correction" fashion I described. The pattern's always the same:



That is:

 • market starts rising out of a bowl
 • gets to a point where it overheats
 • nosedives sharply all the way down to retest just below the previous "propellor spike"
 • retraces halfway up the initial correction and stabilises
 • drifts slowly down from there to settle from where it starts the next cycle

During 2017 these corrections got closer together as we've had both greater market depth AND unprecedented growth during the year. So instead of our 8-monthly crash and recovery we've had 3 of those consolidations (that manifest in the lowest resolution weekly chart) in the last 6 months instead of 1. The last one was in November, peaking at $7500. Together, those 3 consolidations amounted to an aggregate 77% retrace spanning 6-8 months. ($7500, November, $1825 end May).



What this means according to precedent is that we NEED to retest at least that 7500 (+or- 20%) region before progressing. It's just the bitcoin way. This is an uncapitalised asset class that's rapidly capitalising and there's so much clamour to get in that it can't do it smoothly.

The low of $8455 we saw on Bitstamp a couple of hours ago may or may not be the bottom of the wick. To complete the full depth of the needed correction we may have to revisit the $7500 level or even 6k at a pinch to really bake in the last runup but that could just as easily manifest as a momentary panic "fat finger" dump before retracing back up the decline to around the $13k level which is 50% of the consolidation we've had since the peak.


How Does this Compare to the 2013 bubble ?

In fact the 2013 rally and that nightmare 18 month recovery followed exactly the same pattern. The reason it took so long to recover is because it went straight from $126 all the way to the top in 7 straight weeks without any of these bubble-bursting corrections on the way (or even mini corrections). That meant that the last support level was the so called "Cyprus spike" way back in April 2013 when it spiked at $266. And sure enough - according to form - it went all the way back to retest that level and a bit more for good measure. Note this is very different to the situation we have now on 3 counts:

1. the rise from $1000 to $19k (16k realistically) is comparable in relative terms but has taken a whole year instead of just 7 weeks

2. we have 3 fairly hefty consolidations which more or less overlap each other and we've almost arrived at the last of those already

3. the correction is rapid and deep which is a good sign because it snaps the market quickly back into a more reasonable trend that can be sustained (see previous "propellor corrections how they've played out).

Note: the angle between the support level and the 3 retracement lines in the 2013 chart below. You can see from that that the closer the retracement occurs to the peak blow-off, the higher the bottom will be. 2014 went low because it retraced so slowly and didn't hit the fan-line for a whole year.

Conclusion is, this means the bottom will be in fairly quickly and it's likely to be in the region of the $7500 level +/- 20% in my opinion followed by a fairly rapid (21 day) retrace to the upside as shorts close and off-book demand goes back onto the order books. If not, there are still a furter two consolidation levels available below that but it'd be a brave shorter that would put a lot of money behind adverse trades at those levels given the precedents IMO.

Still nicely on target for growth.

Slight correction was required to recover from overheat conditions. Classic propellor correction pattern.

$7500 is the big support level. The bubble started around $8200.

I think the idea of "Guvs" and big banks was to buy up all know bitcoin in sight during the last 8 months of 2017, drive the price up to kingdom come and then slam the market into the ground in attempt to destroy confidence in bitcoin as an asset.

They had to do that to avoid the worldwide debt bubble being "pricked" by bitcoin.

May or may not work.

I'll take flat out Gox scam.

Wouldn't be much point in the Winkies doing that on only 1 exchange.

Did it never occur to you that holding XMR to avoid "tainted coins" is a bit like holding water to avoid sinking ?
 

rofl. Did someone actually say this ?  


Which of these two might happen to be you ?

...or the guvpaper meltdown..

The difference with Bitcoin here is that we actually spent quite a lot of time in the sub $6k mark so expect that support to be much firmer than the $19k to $9k zone which only formed in the last few weeks of 2017 really.

$7500 was also a heavy consolidation zone.

Market looking superb.

They all do this.

These are new asset classes which aren't just under-capitalised, they're un-capitalised. That's why you get these huge retraces after a big rise because there's simply no precedent for the price so you only get a minority of hodlers staying in after the initial rise. But one's the "bottom" is seen to be in you get a rush of capital back into the asset because the dumpers and a whole of of others were actually sitting there like hawks the whole time with their off-book orders waiting for a safe point to re-enter.

Look back at any of the big capitalised cryptos and you'll see the same pattern. BTC/USD, ETH/BTC, XMR, DASH, NEM, LTC etc. This example's taken from the 2016 Monero rise but look at any of them and you'll see the same pattern.

See: https://bitcointalk.org/index.php?topic=178336.msg29279653#msg29279653

It's a propellor overheat correction.

It'll hit around 8500 to 9000 and then start to work it's way back up to the spinner at around $13800 over a period of 3-4 weeks.

Get ready for the next round of bitcoin FUD.

When political and economic maligning doesn't work, move to planetary phenomena.

https://www.zerohedge.com/news/2018-01-31/earths-magnetic-field-shifting-poles-may-flip-could-get-bad

You may be right. I'd sure feel a whole lot more optimistic if that were true.

Guvpaper yields spiking again.

Everybody was saying all that and more in 2014 after the rise to $1200.

$800 - "this is the bottom, Overstock adoption"
$600 - "this is the bottom, new Chinese exchanges coming online"
$400 - "this is the bottom, New Egg, Bitcoin Trust, institutional investment on the way"
$200 - "this is the bottom.....eh"
$180 - "this is the bottom" (And it was).

Bitcoin always makes sure people take pain well beyond their expectations to bake in any new floor. Usually by going all the way to the last long term high and a bit below it. (April 2013 was $266. That had to get retested after the $1200. It did, with an $80 overshoot just for good measure).

Don't be surprised to see at least a wick down to $800.

If any coin is ever going on "Facebook", it's more likely to be Dash than anything else if only because it's the one crypto supporting a trade-clearing protocol and realtime node consensus rather than just mine-time consensus. Embedded web scripts can therefore taok to the blockchain directly (as opposed ot a single machine serving up its version of the blockchain like Litecoin does).

My bullish prediction was based on it being a real market.

If last year's gains were not a real market (i.e. it was a rerun of the Gox situation where fake liquidity is created to pump the price) then all bets are off. That's what it's increasingly looking like. When a single entity is able to cook up billions of tokens from nothing, call them "$USD" and buy up order books all over the globe without - even exchanges - questioning it then clearly the whole valuation's a fake.

rofwl ! So true 

Excellently put