[charts] Completely different TA than ANY other btc reversal in history

[TERA]

Analyze the TA in the follow charts of bear market recoveries, particularly the Stochastic RSI, the depth of the trading range, and the amount of time spent consolidating before breakout. These are all logarithmic charts to help emphasize and compare the depth of trading ranges.











Now look at the CURRENT recovery. Again pay attention to the Stochastic RSI.



The current recovery is completely unlike any other btc recovery in history.

1. The stochastic RSI was never down and is on the moon instead, appearing to give a SELL signal rather than a buy signal. In every other recovery, stochastic RSI is very low and then works its way upwards into the breakout.
2. It has a 55% trading range when every other recovery has a 20% trading range.
3. There is this hammer candle with a complete abandonment of the previous lows in 400-550. Every other recovery has gone down to retest the lows.
4. It has spent 2 days trading before breakout when every other recovery  has spent at least a week.

Thoughts?

[1714582056]

1714582056

[windjc]

My thoughts are these. Crazy news drove us down to retest lows. There were A LOT of shorts (historically unprecendented) driving those lows. There was 6 weekly red candles in a row. We were incredibly oversold in the immediate short term. We are now snapping back.

I think we will make a more historically normal bottom in the next 1-2 months that will be more technically satisfying for you.

[Miz4r]

The current recovery is completely unlike any other btc recovery in history.

1. The stochastic RSI was never down and is on the moon instead, appearing to give a SELL signal rather than a buy signal. In every other recovery, stochastic RSI is very low and then works its way upwards into the breakout.
2. It has a 55% trading range when every other recovery has a 20% trading range. There is this hammer candle with a complete abandonment of the previous lows in 400-550. Every other recovery has gone down to retest the lows.
3. It has spent 2 days trading before breakout when every other recovery  has spent at least a week.

Thoughts?

Perhaps the entire MtGox fiasco has distorted the charts and the usual indicators? It is a rather unique situation we're in right now, kinda like the Silk Road crash and its recovery.

[FeedbackLoop]

This time it's different!





(sorry, someone had to say it. )

[MatTheCat]

Thoughts?

Very interesting observation indeed. I really need to get reading through my TA 101 text book more so that I can noticed these things for myself.

The conclusion that I would come to right away is that is not behaving so much like a natural bear market bottom, but yet another spike down on a long running bear trend. We are currently all out of steam, at a yet lower maxed out price range than the previous one, which was high $600s, lower $700s. We are now high $500s, with a possible sneak up to lower $600 ranges. Perhaps all us amateur Tech Analysts setting out our recovery retracement buy-ins for a text book 66% correction, are going to get our asses kicked when we wake up one day to see all our low $500 and high $400 buy ins triggered, with Bitcoin bouncing around in a panic like craze in the $300 range. I will be honest, at this point in time, I really don't feel that this is on the cards but on the otherhand. For first time in a long time, I am beginning to feel positive on Bitcoin (pending correction notwithstanding) but this bottom has worked out a little bit too much by the book on the face of things.

Perhaps what the indicators belie, is the fact that this has been an artificially forced bottom, as opposed to a more organic market bottom, with the logical conclusion being that there is still more to come?

This is merely a theory and not something I firmly believe in. I will state this as I have had a track record recently of my irrational but firm beliefs about Bitcoin actually coming to fruition (give or take the odd $8.66). I trust I will know soon enough which way the wind is going to end up blowing.

Edit: Same thing can be said with the 1D MACD. On all previous trend reversals, MACD was trending down and infact deeply depressed. On this occasion, MACD was actually trending up prior to 2-3 days of mass sell off and recovery. Conclusion. This could well have been a mere flash crash. Not a trend reversal. Well spotted! If this turns out to be the case, so many people are going to totally fkn burned. Everyone is totally convinced that that was the bottom....even me!

[TERA]

You can theorize that 400 gox crash was either (A) a final capitulation or (B) a flashcrash like silk road.  In either case, there is a problem. In case A, the technicals are invalid, and in case B, a true capitulation has not occured.

[MatTheCat]

Back to looking at this old chessnut it is then, with the two blatant overshoots of the underlying support being flash crashes being attributed to

a) BTC-e/Bitfinex Sell-Off to $100 as a result of exchange being hacked
b) Gox panic.

[Brassguy]

You can theorize that 400 gox crash was either (A) a final capitulation or (B) a flashcrash like silk road.  In either case, there is a problem. In case A, the technicals are invalid, and in case B, a true capitulation has not occured.

While I don't want this to be the case.... (B) feels right to me.... true capitulation hasn't occurred...

[phoenix1]

My gut says the same ... whilst it was an awesome trading opportunity for those that grabbed it, it does not feel right to me. SR was a flash crash in a market that was already on the way up. And it was clearly a PR coup ... 'BTC drug site busted' - it read good for everyone (except SR users!). My instincts tell that whilst GOX leaving is great, the true PR fallout is worse in the short/medium term (a few weeks, possibly longer) as until we know the full story there is a big question mark over exchanges for anyone who is new to BTC. Old-timers may brush it off non-chalantly, but newbies will be more cautious. And now we see the politicos start to weigh in. Is this 'the other shoe' ? IDK ...

I agree with buy the rumour, sell the fact (or the reverse in this case), and that accounts for what we have seen in terms off the price action, but there is still so much we don't know and the potential for Gox to to create more waves from beyond the grave when they are eventually forced to make an announcement.
Until then, it really feels like a coin toss, and that this relief and euphoria, though justified in many ways (Gox had to go), may be premature. It's like a Gox is dead party and there may be a hangover when people realise there are still shockwaves rippling through the system.

No doubt, in the long things will change for the better in many way re implementation of protocol features to prevent such a debacle ever happening again, and probably more people will be drawn in to help with this effort, to work on things that are, as I understand it, already built in, just not implemented.

I know I have not mentioned TA, just speaking from my gut. I am neither scared nor euphoric. My senses are just telling me that something still ain't right. So for now I am waiting patiently and waiting for the fat boy to sing ...

And FWIW, I feel for all of you that have lost coins and cash in this debacle

Just my 2c .... or maybe 4 ... it was a bit long ...

[MatTheCat]

My gut says the same ... whilst it was an awesome trading opportunity for those that grabbed it, it does not feel right to me. SR was a flash crash in a market that was already on the way up. And it was clearly a PR coup ... 'BTC drug site busted' - it read good for everyone (except SR users!). My instincts tell that whilst GOX leaving is great, the true PR fallout is worse in the short/medium term (a few weeks, possibly longer) as until we know the full story there is a big question mark over exchanges for anyone who is new to BTC. Old-timers may brush it off non-chalantly, but newbies will be more cautious. And now we see the politicos start to weigh in. Is this 'the other shoe' ? IDK ...

Just got a freaked out Email from my mother (she knows I have a lot in 'Bitcoin') linking to some falsehood ridden scaremongering article about "the largest and most important Bitcoin exchange going down and stealing everyones money", about how Bitcoin is "financial tyranny and a Ponzi scheme".

[Carra23]

I think we will make a more historically normal bottom in the next 1-2 months that will be more technically satisfying for you.

My thoughts too. The majority sentiment here is that the much awaited correction is over and can rise again. But I anticipate some small, sputtering rises before another leg down.

You can theorize that 400 gox crash was either (A) a final capitulation or (B) a flashcrash like silk road.  In either case, there is a problem. In case A, the technicals are invalid, and in case B, a true capitulation has not occured.

I felt the SR flashcrash was in a market which had stayed stable for a long time and was starting to move up.

[Tzupy]

This was not a true 'reversal', the market still has to go through 2 / 3 of wave C until it will hit the very bottom and then recover.
How long it will take, it depends on volume. With low volume, it could take over 6 months, with high volume (2 big crashes) it would still take 2 months IMO.

[oda.krell]

Analyze the TA in the follow charts of bear market recoveries, particularly the Stochastic RSI, the depth of the trading range, and the amount of time spent consolidating before breakout. These are all logarithmic charts to help emphasize and compare the depth of trading ranges.

[...]

Thoughts?

Good analysis, as always, TERA. Glad to have you on board here.

One thing: I'd be careful to place too much trust on *daily* StochRSI. It moves fast by design, and on the daily time frame it can be a useful trading tool for individual buy/sell decisions, but to judge the likelihood of a longer-term reversal, I believe it is preferable to look at it on a weekly scale:



In which case, we see that your main point stands: We're nowhere near the oversold state we were in in June/July, timewise. That, among other things, makes me rather skeptical this bear market is over yet... even though I'm also skeptical we'll probe new lows soon -- more like a continued, reluctant decline, is what I could see in the coming month.

[ErisDiscordia]

Perhaps what the indicators belie, is the fact that this has been an artificially forced bottom, as opposed to a more organic market bottom, with the logical conclusion being that there is still more to come?

Maybe it wasn't an artificially forced bottom, but an artificially delayed capitulation?

I have no idea how that fits within TERAs TA, but consider this: all this time while the Gox issue was hanging over the BTC economy like a huge boulder ready to crash right into it and drag it down the market didn't feel like making an "organic bottom" with a capitulation in accord with the preceding ones. It was holding its breath, so to say. I feel like without the Gox fiasco we would have already tested and re-tested these lows a week or so earlier, in a manner more resembling the previous bottoms and meanwhile we'd be about where we are now - the sort of consolidation seen after a decisive move up from the bottom. We just waited for a longer time than would be natural, then quickly went through the motion in a sort of relief-driven "Alright, finally we have some closure, let's get this over with" and that might be while the whole thing looks off.

Knowing next to nothing about TA I base this on my own flaky notions I hold about markets, psychology and Bitcoin.

[eboard10]

This was not a true 'reversal', the market still has to go through 2 / 3 of wave C until it will hit the very bottom and then recover.
How long it will take, it depends on volume. With low volume, it could take over 6 months, with high volume (2 big crashes) it would still take 2 months IMO.

Agree, assuming that wave C is at least as large as wave A then it's quite possible that we will revisit sub-$300 levels before the recovery. Scary!

[segeln]

Perhaps the entire MtGox fiasco has distorted the charts and the usual indicators? It is a rather unique situation we're in right now, kinda like the Silk Road crash and its recovery.

these are my thoughts as well

[chesthing]

Agree, assuming that wave C is at least as large as wave A then it's quite possible that we will revisit sub-$300 levels before the recovery. Scary! Awesome!

[porcupine87]

TA is not everything. High RSI suggest to sell and low RSI suggest to buy. So let's see:

[checkers6676]

TA is not everything. High RSI suggest to sell and low RSI suggest to buy. So let's see:

seems like if you did the opposite of those indicators, you'd have done pretty damn good

[oda.krell]

TA is not everything. High RSI suggest to sell and low RSI suggest to buy. So let's see:

You're a regular comedian, aren't you. The only thing you proved by your post is that you know little to nothing about TA.*



*because I'm afraid you'll ask: because that's not how identifying overbought/oversold conditions, or in general, TA, works. You don't look at a single indicator and say "Now I'll buy". So your chart is completely meaningless, like posting a weather forecast of today saying "chance of rain 60%", and then gloating "but it actually *didn't* rain". It is based (a) on a naive idea of how technical analysis works, and (b) on the equally wrong assumption that for TA to be profitable on average it needs to be "infallible", which is not how any probabilistic models works.