Bitcoin Chart Entering Risky WWW Behavior

[BitcoinTraderFX]

You will note that on this chart that the market has begun whipping up and down, in wild, wide movements. This is one of the first warning signs of a topping market.

This is only a sign, a confirmation is required.

[alexeft]

You forgot about fundamentals ie yesterday's hearing in the US.

It was a major event in the life of bitcoin.

[AnonyMint]

It was a major event in the life of bitcoin.

Yes major, but in a bad way:

http://armstrongeconomics.com/2013/11/19/congressional-hearings-on-bitcoin/

[porcupine87]

It was a major event in the life of bitcoin.

Yes major, but in a bad way:

http://armstrongeconomics.com/2013/11/19/congressional-hearings-on-bitcoin/

Absolutely nothing was badly. You can't expect the regulators to say "We get paid for doing nothing. We don't have an eye on this and we don't care, if people start using it and paying no taxes  but drugs online." Be realistic! No investor in Bitcoin expected something like this, so it is no bad news...

[AndrewWilliams]

I think it peaked yesterday and will be rolling around the 600-700 mark today.

[BitcoinTraderFX]

News/fundamentals generally does not form a protracted period of volatility.

It generally takes the shape of a quit period (or drift of gentle profit-taking or accumulation -- but a very gentle slope) followed by a single burst of volatility which resolves almost immediately. This didn't look like normal news volatility, it was too protracted signifying psychological fundamentals. Quite possibly triggered by news, but not by the information of the new (if that makes any sense -- I'm not sure how to explain it).

The warning my algo systems spit out last night was a topping market formation with warning of trendline break. That is generally a different volatility patter which indicates multiple investors/traders profit-taking which exhausts buyer activity. Hence the wide protracted period.

Early this morning the same algos lit up a whole bunch of alarms as well.

Does this mean the end of bitcoin -- no. But as a trader, I was trading the volatility to make dollars profit. From an investor's perspective, *extreme* caution is suggested as this is a "rip" in the clear accumulation of bitcoin by other investors/speculators.

I have a decent holdings of bitcoin, but it's constantly moving between cash and bitcoin as we are traders by training.

But if I had a major holding in bitcoin (and it's still in bitcoin), then I would be watching every 30 minutes like a hawk, for a secondary confirmation of trouble, or the establishment of a downtrend.

As for people waiting for the "dip" to buy more bitcoin, I'm not sure this is the dip you are looking for, as it's definitely forming a "bull trap". If you do take this opportunity, then also extreme caution, and your bitcoin should *hold* it's value (ie. not go below the recent low), or I would liquidate my bitcoin back into cash if it drops significantly below my purchase price (so as not to be caught in a downtrend or "bull trap".) But either way, keep close watch, think more like a trader than an investor for now.

[BitcoinTraderFX]

Sorry about the type, I meant to say that fundamentals/news usually takes the form of a *quiet* period followed by...

Here is one of the alarms that triggered last night (warned of a hidden reversal or "bull trap" where people acquiring bitcoin were going to be forced down:

[BitcoinTraderFX]

*Ignore the timestamp on the chart, it's reading that off one of the servers it's running on.

Here is the language of the warning for the chart above:

An alert has just triggered for a potentially Explosive Opportunity for BITCOIN to go DOWN, and is forming now.

Market internals, and quantitative analysis shows, along with the trend being generally down, a significant chance of STRONG reversal downwards is forming.

This signals an opportunity for you to profit in the short-term by cashing in on this opportunity. If you have LONG POSITIONS, you should exercise extreme caution to protect existing positions and/or profits.
Based on the most recent PIVOT HIGHs, a good place to set stop losses would be around the most recent green box PIVOT HIGH (which is currently at 772.3418).

If you are already short, then this is extra confirmation of your short position. If you are already long, then you should use extra caution.
From an Investment Perspective: If your objective is to protect your BITCOIN Account Value, since this is an indication that BITCOIN may be heading down, you can convert some of your BITCOIN into Cash/Fiat-Money to protect your BITCOIN Account Value. Then if prices come back above the most recent green box PIVOT HIGH (which is currently at 772.3418), then you can rebuy your BITCOIN and let it continue to go up.

[AndrewWilliams]

Interesting.

So to summarize, we hit 900, slumped back down to 500. Now at about 600 and climbing.

Since the support is 500, we are at a safe entry point, right?

It will probably go back up to 1200 this time, then repeat a sell off back to 800?

[DeathAndTaxes]

Interesting.

So to summarize, we hit 900, slumped back down to 500. Now at about 600 and climbing.

Since the support is 500, we are at a safe entry point, right?

It will probably go back up to 1200 this time, then repeat a sell off back to 800?

There is no significant support (or at a minimum unproven support) at 500.  Just because a short term chart reverses on low volume at a price doesn't make it support.

The above post (not saying I agree or disagree with it) is saying Bitcoin has an increased chance of testing new short term lows HOWEVER if it moves above 772 then that trend is broken and staying short is probably a mistake.

[BitcoinTraderFX]

From a purely technical perspective I definitely do not see support formation from the last 12 hours.

[AndrewWilliams]

OK.

So what are your analytical skills telling you about near future?

[AnonyMint]

Interesting.

So to summarize, we hit 900, slumped back down to 500. Now at about 600 and climbing.

Since the support is 500, we are at a safe entry point, right?

It will probably go back up to 1200 this time, then repeat a sell off back to 800?

There is no significant support (or at a minimum unproven support) at 500.  Just because a short term chart reverses on low volume at a price doesn't make it support.

The above post (not saying I agree or disagree with it) is saying Bitcoin has an increased chance of testing new short term lows HOWEVER if it moves above 772 then that trend is broken and staying short is probably a mistake.

Listen up all ponzi bitCONers, the price will eventually return to the long-term exponential trend line which means you have no incentive whatsoever to sell because you will not likely get back in at a lower price and many of you pay capital gains tax when you well.

The math is undeniable, once you are in the ponzi scheme, you stay in until the mad stampede for the exits which of course is also undeniable from the math.

[AndrewWilliams]

Don't mind him. Too much Robitussin.

[BitcoinTraderFX]

@Andrew --
Over the next 8 hours want to see it get above that resistance line, and hold for longs.
If not and keeps bouncing lows, then it's looking like slow going until some other fundamental change.

You can see that it already bumped its head on that line (from my earlier post).

If you could realistically short bitcoin with margin, I would be shorting it on bumps down.

The thing is that price has memory. So it has to be able to shake off the people burned at that support line.
(Assuming bitcoin buyers and sellers have the same psychology as commodity and stock traders, which I'm sure they do.)

[AndrewWilliams]

Awesome.  Thanks for some good technical analysis.

Now, after it goes from the current 580 to 800ish, do you think it will actually hold this time or come back down?

[BitcoinTraderFX]

Price has memory. So it has to get above previous high milestones. Each milestone penetrated and bounced off is a PLUS.

So from a trader's perspective, making new highs, I buy each bounce. Going down, sell each bump.

[BittBurger]

It was a major event in the life of bitcoin.

Yes major, but in a bad way:

Howso?

"Senior U.S. law-enforcement and regulatory officials said they see benefits in digital forms of money.  US officials called it a "legitimate" financial service.  Federal Reserve Chairman Ben Bernanke said that virtual currencies "may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system."

- Wall Street Journal today

Best news Bitcoin has ever had.   Period.

[antoineph]

That's how to trade like a "trader" if I understand well, not by making predictions, but buying on the uptrends and selling on the downtrends.

[AndrewWilliams]

Price has memory. So it has to get above previous high milestones. Each milestone penetrated and bounced off is a PLUS.

So from a trader's perspective, making new highs, I buy each bounce. Going down, sell each bump.

BTW, which exchange do you use?

Many exchanges have gone off line, or had some sort of tech difficulties in the past couple days. Not ideal for trading!

I don't want to be "trapped" using the wrong exchange and get locked into a move while an exchange has issues.