too many were expecting a drop. the market doesn't like to hand out profits cheap

news does not generally move the price the way you think it does.

guys, it's been said so many times already but clearly not many enough -- bitcoin price action is not motivated by news, generally speaking. "looking" for a reason for the recent slide is foolish. we moved down because we were overbought, that is, the ticker price was above the "true" value, and many traders thought that $600 was a good price to sell at. that is pretty much it

--arepo

the data is in!

i apologize for not being very specific in my previous post, but it's important empirical practice not to make claims that the data doesn't support. the picture was looking a little bit fuzzy before this most recent price action. so what just happened? the not-so-rare case of speculators contributing to price volatility:

---
6-hour scale


https://i.imgur.com/LVjtXyu.png

---

my best hypothesis is that this 6-hour candle that's just about to close represents what happens when too many traders short or sell coins with the expectation of profit. since the market moves to minimize profit, when too many traders short but the market consensus is bearish, in order to minimize the excess profits which would correspond with the downtrending market, a short squeeze occurs. this is a counter-trend movement which causes the weakest hands to close their position, in this case buy back in, before moving downwards, thereby minimizing the overall profitability of the move. i hope none of you got squeezed out!

so the spike up started with a large buyer, but then was compounded by more and more traders closing their short position with a market buy. then, after enough traders were squeezed out, we moved down to the next support. so what can we deduce about future market behavior from this strange candle?

let's take a look at some indicators:

---
daily scale


https://i.imgur.com/dkkkEqy.png

---

the MFI has formed a solid flat-bottom support, which leaves some room for a downward bounce, but reduces the possibility of moving lower than the 3rd target from page 10. if we do make that lower low, but the MFI shows a bounce off of this newfound support, that would mark the end of this bearish action, as a lower low in the price corresponding to an even low in the indicator is bullish.

the Mass Index is flattening out, which is also bullish. again, its first positive-slope movement could easily be associated with another movement down, but this inflection generally marks the start of a new trend.

the CCI is pretty deep in oversold territory, which usually corresponds to peak bearish activity heralding a reversal, again consistent with the MFI and Mass Index. the steadily increasing bid depth and new disparity between the bid/ask spread (the orderbook has completely reversed since yesterday, with the bid side slope being greater than the ask for the first time since we started this downswing) also suggests that we haven't much more downside to this price action.

the only strictly bearish indicator is the MACD, which shows an immature crossover to the downside. this signal is immature, however, because the daily candle that is contributing to it has not yet closed, so that's definitely something to keep an eye on.

in conclusion, a move to the 3rd target from page 10 is still possible, but action below this support is unlikely at this point.

--arepo

edit: thanks for bearing with me (no pun intended ) while i collected enough data to make a strong case. i know that price action this week has been a bit crazy, so i hope i've been making my supplementary analysis a comprehensive play-by-play to pair with the newsletter. i received some questions via PM and in this thread, which is great -- keep 'em coming if there's any clarification needed! i launched this project specifically to help you all feel more comfortable and more informed in your trading strategies.

lagging price is definitely the best way to make money

did you buy at $1200 too?

so your targets are based on the log-scale trendline in the same post? i'm not sure how sound of a model that is... your data even shows that the price regularly spends time far off the trendline because of the bubble-crash cycle. why do you believe that the price should stay close to the trendline, or close enough to use it for specific price predictions, from here on out?

bitcoin broke up & down simultaneously in the last 6h... crazy tall doji candle

not really sure what to make of it...

so you rescind this earlier prediction?

yes, this compromises our mid-term reversal, for the time being. that is, it opens the possibility of another major capitulation event before we break out of the mid-term downtrend. this would correspond with the 3rd target from page 10 (but remember to take into account the $550 wall on bitstamp). further price erosion without large volume can bring us back down to the $578 low, but i doubt we will see new lows without corresponding volume highs.

in the case of hitting the 3rd target, will this support hold or will we see even lower lows? it is hard to say without analyzing the data associated with the movement. it is certainly possible that price behavior could turn very bearish very quickly, as this is the fifth consecutive red candle on the daily scale and the bid-side of the orderbook is still precariously thin. i will be sure to comment further on this possibility before the week's end.

--arepo

are the altcoins crashing?

Litecoin's mini-bubble just burst, but that was completely due to bitcoin speculators seeking short-term profits. it's simply tracing out the same bubble pattern as Bitcoin, and i see no fundamental reason for it to trace all the way back to pre-November prices.

i think the crypto-despair is infecting the other coins, but sentiment lows are always the best time to buy

--arepo

I hope the newsletter has helped everyone anticipate the price action we've been seeing. We've just touched the second bearish target from page 11 ($575), and i'm altogether pleased with the accuracy of my derived supports so far. as always, feel free to post questions and comments here in this thread.

I am also pleased to announce that my Daytraders' Daily Report will be launched this Saturday, 22 March! it will consist of a single email with a brief comment on the day's outlook as well as price targets, sent out daily between 12 am and 9 am EST. if anyone is interested in this service, please PM me for details

--arepo

i know the new KYC/AML implementations are forefront right now, but could someone comment on the above? i would really appreciate some clarification.

--arepo

a brief perusal of the past 10 or so pages of this very thread should clearly demonstrate the reason behind Litecoin's current price behavior.

that being said, it is downright fallacious to conclude that Bitcoin speculators toying with the Litecoin exchange rate because of stability on the Bitcoin exchanges reduces the whole project to pump&dump status. it's us, silly

this was a terribly aggressive response to one person's opinion about the market value...

are you afraid of bears?

edit:

+1

it's called brand loyalty, and it's human nature. give up on trying to sell the idea here, it is exactly like trying to explain bitcoin to the somethingawful crowd back in 2012. not saying ripple is or isn't viable, but if XRP is not a pump&dump then there's little incentive for you to try to get more people involved, anyway. if it's destined for success don't waste your energy in the meantime just wait for it to become mainstream.

that's not what this means at all. it would take 3.13 years to repay only if every profit made globally was applied to the debt for that entire period of time. which is impossible because everybody would starve and/or freeze to death in about a month...

but by the logic of the debt paradox, since 95%+ of the money supply is debt money that is collecting interest, even if the currency that is involved to pay off your own interest is reused, it itself has associated interest due of some third party not mentioned in your example. if the total amount of debt is greater than the total amount of currency in circulation, then does it matter how much the actual total value of goods in the economy grows (e.g. catching additional loads of fish)?

been trading BFX for awhile now, through TorBrowser. recently i noticed that the site would return a "security error" every now and again, citing my IP and forcing me to reconnect with a different identity. why is this?

also, i know some traders who are being offered 4:1 leverage. why is my highest option 2.5:1?

thanks

--arepo

+1

this is a demonstrable truth. imagine if there were a single button that, when pushed, launched all of the nukes in the US simultaneously. the amount of security required to render the existence of such a device safe in any respect would be extraordinary. this is why concentrated power is dangerous, not because the controllers of such power are necessarily "evil", but because the risk of actors with divergent interests gaining control of such power is too great. this is the magic of bitcoin and any other decentralized system -- it remains safe as long as honest actors hold majority over dishonest actors. there is no hub to seize and corrupt. with no king to assassinate, a greater peace and stability is achievable.

i think the problem was that the bid side depth was too shallow, so sellers were waiting for a better deal with less slippage to unload. hope you didn't already buy back in TERA