Why we may be stuck in the current range for long

[Hell-raiser]

When Bitcoin was going to its ATH in December, many people here assumed that Bitcoin price wouldn't go below 12k. And at first it looked exactly like that. Bitcoin rebounded strongly at a little below 13k and went all the way up to 15-16k. Those who didn't believe in that theory finally became convinced and bought in when the price plunged again. And then we all know what happened. Bitcoin went as low as 6k. Now it seems that 12k turned into an impenetrable selling wall which will be hard to crush because those who bought at that and higher levels will now be trying to close their positions at all costs. And the longer we stay at sub-10k levels, the more resistance will be building above 10k.



So we are kinda stuck in this range of 8-11k.

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[TheQuin]

I would have to disagree that the resistance at 12k is "an impenetrable selling wall". There is a consolidation taking place which has found that resistance at 12k and also support around 8.3k. When that happens many traders will play the range and buy the bottom and sell the top repeatedly until it breaks out. That means if it does try and breakout upwards there will be many shorts trapped that will need to buy to cover, that will be the fuel for the next spurt upwards. Equally the opposite is true if it breaks down. Anyone who thinks they can predict which of those two things will happen is fooling themselves. Trading isn't about predicting which way it will breakout but rather recognising it when it happens and then reacting quickly to that.

[Don Pedro Dinero]

I would have to disagree that the resistance at 12k is "an impenetrable selling wall".

I don’t believe 12k is a barrier either.

Trading isn't about predicting which way it will breakout but rather recognising it when it happens and then reacting quickly to that.

I rather believe technical analysis is more useful to understand the past. Trading predictions massively fail, and that’s why 95% of traders lose money, but when you say traders recognize a pattern and react, I think they contribute to the changes: they believe it will go up, thus, they buy, and price goes up. They believe it will go down, they start selling and more panic comes, dragging down the price.

The title itself it’s quite revealing “Why we may…” So, I think we may or may not.

[TheQuin]

I rather believe technical analysis is more useful to understand the past. Trading predictions massively fail, and that’s why 95% of traders lose money, but when you say traders recognize a pattern and react, I think they contribute to the changes: they believe it will go up, thus, they buy, and price goes up. They believe it will go down, they start selling and more panic comes, dragging down the price.

The title itself it’s quite revealing “Why we may…” So, I think we may or may not.

People would be surprised how little technical analysis professional traders use. Often nothing more sophisticated than using horizontal lines to mark support and resistance levels, not that they are going to trade them, but just as an area of interest to start paying a bit more attention and see if they can see some clues in the order flow.

There is a massive industry in selling TA tools and education based on TA targetted entirely at retail traders. If you visit a prop trading desk you will not see any of it in use.

[Hell-raiser]

I would have to disagree that the resistance at 12k is "an impenetrable selling wall". There is a consolidation taking place which has found that resistance at 12k and also support around 8.3k. When that happens many traders will play the range and buy the bottom and sell the top repeatedly until it breaks out. That means if it does try and breakout upwards there will be many shorts trapped that will need to buy to cover, that will be the fuel for the next spurt upwards. Equally the opposite is true if it breaks down. Anyone who thinks they can predict which of those two things will happen is fooling themselves. Trading isn't about predicting which way it will breakout but rather recognising it when it happens and then reacting quickly to that.

Well, maybe I should have clarified it a little further in OP. I don't mean that 12k itself is impenetrable. It is what sits above this mark which may be quite hard to pass through. Look, people have been buying all the way down from like 15k. Now many of them will be eager to sell at or slightly above their entry points, that is anywhere in between 12-20k. In other words, it is not like you break out of the resistance at this price level and then there will be no more significant resistance. To the contrary, I'm strongly inclined to think that there will be even more resistance building when (if) we manage to get above that price somehow.

[arpon11]

I also think bitcoin will be in range for a very long time. Bitcoin has done very well last year and I think it will take more time before we can actually see another great progress. I don't think the price will go down more than $6,000 this time around and we may also see the high it can go now is $12,000. If any positive things happen then  we may began to see some recovery.

[TheQuin]

Look, people have been buying all the way down from like 15k.

Who was selling to them? A lot of people getting short because they believe it is going down further. There is the possibility of a serious short squeeze ahead that would just blow through all that resistance. As I already stated that isn't a prediction that it will happen but a recognition that either is equally likely in this situation.

[Hell-raiser]

Look, people have been buying all the way down from like 15k.

Who was selling to them? A lot of people getting short because they believe it is going down further. There is the possibility of a serious short squeeze ahead that would just blow through all that resistance. As I already stated that isn't a prediction that it will happen but a recognition that either is equally likely in this situation.

Maybe that guy who is a trustee of the deceased Mt. Gox and who keeps the coins of their clients? He still has something like 160k bitcoins if I'm not mistaken, and this amount will be more than sufficient to satiate all demand that may (or may not) accumulate over time. If anything, with this amount of coins in his custody he can easily crash the Bitcoin price to triple digits. So I don't think we can seriously expect a "big squeeze" event any time soon.

[TheQuin]

Maybe that guy who is a trustee of the deceased Mt. Gox and who keeps the coins of their clients? He still has something like 160k bitcoins if I'm not mistaken, and this amount will be more than sufficient to satiate all demand that may (or may not) accumulate over time. If anything, with this amount of coins in his custody he can easily crash the Bitcoin price to triple digits. So I don't think we can seriously expect a "big squeeze" event any time soon.

Ignore the FUD, that's a tiny amount of coins and really doesn't affect the market. Look at LTC and what happened when Charlie Lee cashed out. Nobody even noticed until he announced after it was done.

It is just a truism of trading, for every buyer, there must be a seller. If you do what you are here and focus on what the buyers will do then you are missing half the picture. That half the picture is what will the shorts do if 12k gets seriously tested?

[talkbitcoin]

And the longer we stay at sub-10k levels, the more resistance will be building above 10k.

you can also say that the more we stay at sub 10k and above certain prices like for example above $9000 there is more buy support building up at $9000
that is why price keeps going back to that level again and bounces back up to test $12k again.

[Sukovsky]

Fud or not. This rally is over. Prepare for the slumber.

[Hell-raiser]

Maybe that guy who is a trustee of the deceased Mt. Gox and who keeps the coins of their clients? He still has something like 160k bitcoins if I'm not mistaken, and this amount will be more than sufficient to satiate all demand that may (or may not) accumulate over time. If anything, with this amount of coins in his custody he can easily crash the Bitcoin price to triple digits. So I don't think we can seriously expect a "big squeeze" event any time soon.

Ignore the FUD, that's a tiny amount of coins and really doesn't affect the market. Look at LTC and what happened when Charlie Lee cashed out. Nobody even noticed until he announced after it was done.

It is just a truism of trading, for every buyer, there must be a seller. If you do what you are here and focus on what the buyers will do then you are missing half the picture. That half the picture is what will the shorts do if 12k gets seriously tested.

Honestly, I think you are clutching at straws here. If you want to say that the price crash from 20k was due to massive shorts, they should be closed by now, in fact long ago when the price had hit sub-6k levels. It simply didn't make sense to keep them because the profit potential below 6k was minuscule. The price could of course have gone lower to 4-5k but that just wouldn't be worth the risk. 6k was an ideal price to get out of shorts. Personally, I'd say most shorts were closed exactly around 12k provided there were any in the first place. And that supported the price back in early January and gave false hope to some unwary traders.

[alyssa85]

Fud or not. This rally is over. Prepare for the slumber.

I think the reason for the quiet market is that there is no big news, no reason to buy. None of the merchants that dropped bitcoin last year have changed their mind. But they continue to add other cryptocurrencies. That's a red flag for bitcoin.

[TheQuin]

Honestly, I think you are clutching at straws here.

You're welcome to think that. I've been a professional futures trader for over 12 years and that is how I read the situation. I didn't say that the drop from 20k was "due to massive shorts". That was naturally started by profit taking and that then induces the shorts to come in. I'm saying that there are a lot of traders short right now with an entry price of less than 12k. If that gets tested they'll panic and buy to cover. That then causes a pop that induces the longs to come back in and chase it. Rinse and repeat, that's how markets move.

[~Bitcoin~]

And the longer we stay at sub-10k levels, the more resistance will be building above 10k.

So we are kinda stuck in this range of 8-11k.

- Longer we stay at sub 10k levels, we will also build some buy support on around 9k along with resistance over 10k.
- Weak hands might keep on dumping but whales will put buy orders on support levels to fill their bags.
- When all weak hands will finish dumping their coins, real rally will stat which will be big enough to broke every sell wall above.

This is just my speculation, not a trade advice...

[pey]

  Are you new here? I think I will be happy if it stucks in that range for less than a year. It has stucked below its ath from 2013 for approximately four years and you complain about it now.

[fabiorem]

If you want me to sell, jump the price to $100k. Then I will sell 10%.

Bitcoin is not a simple stock. And is not a fiat currency from a specific country, like in FOREX markets.

Bitcoin is a disruptive commodity which can change the entire financial system.

If you understand the implications of it, you will see that the price is cheap right now. And you know it is cheap because the guys from the old financial system are trying to manipulate it, be through Wall Street or the Mt.Gox trustee. They dont want bitcoin to succeed, so they want the price down. If you sell, you will be capitulating to their designs.

[Msile]

I also fear this. I'm afraid though that because of the lack of going up, more and more people lose interest and many might sell off, allowing a dump to $6000 or something. That better not happens.

[BTCLovingDude]

i don't think the bottom is $8k. it is more like sitting at $9k.
but since this is bitcoin and bitcoin can be quite volatile thanks to the investors irrational behavior, we sometimes see lower numbers which never last long.

in any case i wish there was an easy way of knowing when we get out of this phase and get back to normal bitcoin with slow rises and sometimes big rallies.
i think at this point we may need a big news to get things started.

[zarados]

I would have to disagree that the resistance at 12k is "an impenetrable selling wall". There is a consolidation taking place which has found that resistance at 12k and also support around 8.3k. When that happens many traders will play the range and buy the bottom and sell the top repeatedly until it breaks out. That means if it does try and breakout upwards there will be many shorts trapped that will need to buy to cover, that will be the fuel for the next spurt upwards. Equally the opposite is true if it breaks down. Anyone who thinks they can predict which of those two things will happen is fooling themselves. Trading isn't about predicting which way it will breakout but rather recognising it when it happens and then reacting quickly to that.

Agree, trading is not a matter of predicting where the graph is going, theory a, theory b, blah blah blah. If there are people who are always on target in the prediction, of course he will be very rich. There are even fools who consider themselves smart by making a trading bot. Well, I don't think a bot will say the price will drop to more than 50% of the last ATH.