Something, something, something, technical analysis

[oda.krell]

I took a picture of what the early reversal phase of 2013 (July) looked like in terms of fibo levels. Note how, similar to now, at first price was zig-zagging around the 23% retracement level (red rectangle) of the initial uptrend (from ~63 to ~100). That was shortly afterwards followed by a big dump that took price down below the 50% level. However, on the 6h chart we closed exactly once below that level, and then began a beautiful, uninterrupted rise to the end (i.e. we made a new post capitulation high). See: green rectangle.

I think it's interesting to observe that volume wasn't particularly impressive during the early stages of that recovery... I can't really call it a divergence, but it also doesn't look confidence inspiring. The price action on the other hand was impressive: over the course of about 11 days we made it through 50%, 38%, 23%, 0% levels with no additional serious retracement down.


What about now? I suspect the following two factors will greatly influence whether we will see the reversal fizzle out again like in March, or whether we're really turning around this time: (a) how much force the downtrend on the 6h scale still has, and (b) how much force the following uptrend on the 6h scale will have.

If we end the 6h downtrend early, say within the next 24 to 48h, then I see a good chance that the following uptrend on the 6h scale will take us above 548 (to a new post capitulation high), which means the situation would look pretty different from March.

If, on the other hand, the 6h downtrend drags out, for another 4 days or so, keeping us near or below 23%, then we could hope for the following uptrend to be unexpectedly strong, taking us to a new high (though I'd consider that less likely), or we could see another anemic uptrend on the 6h scale, like the one from March 12 to 14, after which I'd give it a high chance that we'll see a more dramatic decline shortly afterwards.

[JustAnotherSheep]

I'm not entirely sure we're out of the downtrend yet. The trendline might have been broken, but at the same time this price movement looks very fractal/self-similar to me. The previous 2 major drops have always been marked by a sharp increase directly afterwards, followed by a slowly stagnating price for a few weeks/a month, before dropping down heavily again. This pattern seems to be shaping up at the moment as well, particularly in relation to the last such cycle, which would mean price going down to $400-ish by mid-May, after which time the triangle will have long ended, leaving very little support to prevent a sharp drop.

Along with this, I'm trying to apply my fibhorn technique to get a sense of price targets if the bear scenario is still relevant. While previously $260~ has seemed like a solid target, the latest price developments seem to be painting an increasingly bearish picture, with a 0 level at $160 making a very good fit, and it pings nicely with earlier price movements as well. Then again, ratio analysis seems to support a bottom nearer my original $260~ prediction. If one looks at the ratio of the previous peak-drop (710-340), and applies it to the latest peak of $540, the result is $270.



I suppose it's possible the $250-270 range may act as support, which will be immediately followed by a sharp rise and yet another cycle taking us to $160 bottom, like so;



Good trading opportunity if true

This is all, of course, nooby fringe TA, and only even remotely relevant if the bear trend is still on, so take it as you will. If daily SMA50 and 100 are broken, I will consider the bull market confirmed. Until then, I remain undecided, leaning towards being a bear.

Just my 2 satoshi

[BitchicksHusband]

If that happens, I'll be buying all through the $3xxs, $2xxs and $1xxs.

[windjc]

I'm not entirely sure we're out of the downtrend yet. The trendline might have been broken, but at the same time this price movement looks very fractal/self-similar to me. The previous 2 major drops have always been marked by a sharp increase directly afterwards, followed by a slowly stagnating price for a few weeks/a month, before dropping down heavily again. This pattern seems to be shaping up at the moment as well, particularly in relation to the last such cycle, which would mean price going down to $400-ish by mid-May, after which time the triangle will have long ended, leaving very little support to prevent a sharp drop.

Along with this, I'm trying to apply my fibhorn technique to get a sense of price targets if the bear scenario is still relevant. While previously $260~ has seemed like a solid target, the latest price developments seem to be painting an increasingly bearish picture, with a 0 level at $160 making a very good fit, and it pings nicely with earlier price movements as well. Then again, ratio analysis seems to support a bottom nearer my original $260~ prediction. If one looks at the ratio of the previous peak-drop (710-340), and applies it to the latest peak of $540, the result is $270.



I suppose it's possible the $250-270 range may act as support, which will be immediately followed by a sharp rise and yet another cycle taking us to $160 bottom, like so;



Good trading opportunity if true

This is all, of course, nooby fringe TA, and only even remotely relevant if the bear trend is still on, so take it as you will. If daily SMA50 and 100 are broken, I will consider the bull market confirmed. Until then, I remain undecided, leaning towards being a bear.

Just my 2 satoshi

My gut would tend to agree with you. And my instincts are normally spot on.

However, there is a truth that if everyone refuses to sell, that the bear market can't continue. And it seems like fewer and fewer people are willing to sell on the exchanges that control the price. Why do it, when you can sell off exchange and not make the price go down? (I'm talking to you miners).

As much as there isn't demand to push the price up, the question then becomes who is left to sell?

I know it seems like the answer to that question has plenty of answers, but it even felt like the last capitulation to 340 was basically agreed on by everyone in advance. Now it seems like everyone is agreeing to wait it out until we go up.

That sounds, on its face, like sheer lunacy. But there is more than a 0% chance that this is actually a close description to the situation at hand.

[oda.krell]

I'm not entirely sure we're out of the downtrend yet. The trendline might have been broken, but at the same time this price movement looks very fractal/self-similar to me. The previous 2 major drops have always been marked by a sharp increase directly afterwards, followed by a slowly stagnating price for a few weeks/a month, before dropping down heavily again. This pattern seems to be shaping up at the moment as well, particularly in relation to the last such cycle, which would mean price going down to $400-ish by mid-May, after which time the triangle will have long ended, leaving very little support to prevent a sharp drop.

Along with this, I'm trying to apply my fibhorn technique to get a sense of price targets if the bear scenario is still relevant. While previously $260~ has seemed like a solid target, the latest price developments seem to be painting an increasingly bearish picture, with a 0 level at $160 making a very good fit, and it pings nicely with earlier price movements as well. Then again, ratio analysis seems to support a bottom nearer my original $260~ prediction. If one looks at the ratio of the previous peak-drop (710-340), and applies it to the latest peak of $540, the result is $270.



I suppose it's possible the $250-270 range may act as support, which will be immediately followed by a sharp rise and yet another cycle taking us to $160 bottom, like so;



Good trading opportunity if true

This is all, of course, nooby fringe TA, and only even remotely relevant if the bear trend is still on, so take it as you will. If daily SMA50 and 100 are broken, I will consider the bull market confirmed. Until then, I remain undecided, leaning towards being a bear.

Just my 2 satoshi

My gut would tend to agree with you. And my instincts are normally spot on.

However, there is a truth that if everyone refuses to sell, that the bear market can't continue. And it seems like fewer and fewer people are willing to sell on the exchanges that control the price. Why do it, when you can sell off exchange and not make the price go down? (I'm talking to you miners).

As much as there isn't demand to push the price up, the question then becomes who is left to sell?

I know it seems like the answer to that question has plenty of answers, but it even felt like the last capitulation to 340 was basically agreed on by everyone in advance. Now it seems like everyone is agreeing to wait it out until we go up.

That sounds, on its face, like sheer lunacy. But there is more than a 0% chance that this is actually a close description to the situation at hand.

I actually think that perfectly describes the current situation. But you're forgetting one thing, imo: that already was the situation in early March, or pretty close to it.

The big panic moments seemed behind us. Holders vowed to not panic another time. "This time we will just hodl, no matter what".

But then the low level selling pressure (China? Mining? Both?) slowly made the price grind down, and that always has a habit of turning 'I swear, I will never again panic' holders into, well, panic sellers.

That's on the horizon again, unless the price level where we landed after the initial euphoric swing can be sustained this time.

[windjc]

I'm not entirely sure we're out of the downtrend yet. The trendline might have been broken, but at the same time this price movement looks very fractal/self-similar to me. The previous 2 major drops have always been marked by a sharp increase directly afterwards, followed by a slowly stagnating price for a few weeks/a month, before dropping down heavily again. This pattern seems to be shaping up at the moment as well, particularly in relation to the last such cycle, which would mean price going down to $400-ish by mid-May, after which time the triangle will have long ended, leaving very little support to prevent a sharp drop.

Along with this, I'm trying to apply my fibhorn technique to get a sense of price targets if the bear scenario is still relevant. While previously $260~ has seemed like a solid target, the latest price developments seem to be painting an increasingly bearish picture, with a 0 level at $160 making a very good fit, and it pings nicely with earlier price movements as well. Then again, ratio analysis seems to support a bottom nearer my original $260~ prediction. If one looks at the ratio of the previous peak-drop (710-340), and applies it to the latest peak of $540, the result is $270.



I suppose it's possible the $250-270 range may act as support, which will be immediately followed by a sharp rise and yet another cycle taking us to $160 bottom, like so;



Good trading opportunity if true

This is all, of course, nooby fringe TA, and only even remotely relevant if the bear trend is still on, so take it as you will. If daily SMA50 and 100 are broken, I will consider the bull market confirmed. Until then, I remain undecided, leaning towards being a bear.

Just my 2 satoshi

My gut would tend to agree with you. And my instincts are normally spot on.

However, there is a truth that if everyone refuses to sell, that the bear market can't continue. And it seems like fewer and fewer people are willing to sell on the exchanges that control the price. Why do it, when you can sell off exchange and not make the price go down? (I'm talking to you miners).

As much as there isn't demand to push the price up, the question then becomes who is left to sell?

I know it seems like the answer to that question has plenty of answers, but it even felt like the last capitulation to 340 was basically agreed on by everyone in advance. Now it seems like everyone is agreeing to wait it out until we go up.

That sounds, on its face, like sheer lunacy. But there is more than a 0% chance that this is actually a close description to the situation at hand.

I actually think that perfectly describes the current situation. But you're forgetting one thing, imo: that already was the situation in early March, or pretty close to it.

The big panic moments seemed behind us. Holders vowed to not panic another time. "This time we will just hodl, no matter what".

But then the low level selling pressure (China? Mining? Both?) slowly made the price grind down, and that always has a habit of turning 'I swear, I will never again panic' holders into, well, panic sellers.

That's on the horizon again, unless the price level where we landed after the initial euphoric swing can be sustained this time.

Is that around $440, in your opinion? Or $400?

As for your other comments, I guess I don't remember people feeling the same after the Gox situation. Maybe they did. It did seem like not too long before China reared its ugly "news" head.

I will say this, if this market lingers downward and then in a couple of weeks we started getting "negative news" from somewhere, (quotes suggesting that the market just chooses some news to classify as negative) and that causes more and deeper sell offs, then I am going to be watching buy volume like a hawk in the future. It will prove to me that buy pressure is much more important to the bulls recovery than a "lack of selling" pressure.

[oda.krell]

[...]

Is that around $440, in your opinion? Or $400?

As for your other comments, I guess I don't remember people feeling the same after the Gox situation. Maybe they did. It did seem like not too long before China reared its ugly "news" head.

I will say this, if this market lingers downward and then in a couple of weeks we started getting "negative news" from somewhere, (quotes suggesting that the market just chooses some news to classify as negative) and that causes more and deeper sell offs, then I am going to be watching buy volume like a hawk in the future. It will prove to me that buy pressure is much more important to the bulls recovery than a "lack of selling" pressure.

Yeah, sorry, should have phrased that more clearly. I meant the level that the first major rally takes us to after a capitulation bottom (or what looked like it at the time). So, around 630 in early March, 490-500 now. Which is, to my mind, the plateau that needs to be "defended" by a combination of lack of selling pressure (done) and sufficient buying pressure (outlook hazy). Once it was clear the plateau can't be defended (like in March 18 to 20), the panic selling started.

[Bitcoin_is_here_to_stay]

I also believe the current stagnation is a sort of stand off between btw hodlers, refusing to sell, and investors waiting with fiat on the sidelines, refusing to buy at  the current prices. Of course, I cannot know how it resolves - nobody can. But I have read the miners forum and miners there are talking about maxing their credit cards etc or even not paying bills, fully expecting that prices will go up substantially in the very near future. Many miners will *have to* sell some bitcoins soon, just to cover their expenses. OTOH, nobody really *has to* but bitcoins ... So imho, price is more likely to go down, at least until the situation with many miners being in debt now would resolve. 

[windjc]

I also believe the current stagnation is a sort of stand off between btw hodlers, refusing to sell, and investors waiting with fiat on the sidelines, refusing to buy at  the current prices. Of course, I cannot know how it resolves - nobody can. But I have read the miners forum and miners there are talking about maxing their credit cards etc or even not paying bills, fully expecting that prices will go up substantially in the very near future. Many miners will *have to* sell some bitcoins soon, just to cover their expenses. OTOH, nobody really *has to* but bitcoins ... So imho, price is more likely to go down, at least until the situation with many miners being in debt now would resolve. 

Miners talking about maxing their credit cards to cover expenses is very bearish news.

One can't really say second or third hand from a forum post, but if that's true in any widespread sense, then that is bearish indeed.

I think its dumb to be a miner in this market anyway. Better just to invest in bitcoin. Mining makes no sense at a small time player level. Better to mine alts.

[Bitcoin_is_here_to_stay]

I have no idea what is a general sentiment among miners - but what I gleaned from bitcoin talk discussion is that they view current price levels as temporary and are trying to survive by taking on debt.

I do agree that mining does not make sense economically atm - some of the miners are using curious argument of the type "I mine bitcoins while I still can" 

Anyways, I am also waiting for imho inevitable crash in mining rig prices and perhaps bankruptcies of some mining companies. Miners can be in a real tough spot soon - unlike GPUs, ASICs can be only used for mining, so their prices can decrease dramatically.

[oda.krell]

Let's try a new triangle, to describe the bounds of a continued bear market/consolidation, i.e. in case we don't manage to "defend" the current ~500 plateau:





Judging by how the market seemed to resolve (or at least: test) those triangles a bit ahead of time the previous instances, we might see a decisive move against the bounds of this triangle in late May/early June.

[sgbett]

seems entirely possible. suits my short term bearish outlook. satisfies the 'ohmigosh it can't possibly go lower' aspect of capitulation/max pain.

i like it sir!

[oda.krell]

seems entirely possible. suits my short term bearish outlook. satisfies the 'ohmigosh it can't possibly go lower' aspect of capitulation/max pain.

i like it sir!

Thanks. Combines "the bottom is in" with "the pain isn't over"... what's not to like :D

[m3g4tr0n]

It's what I believe is going to happen, so I went full fiat at 512 with the hope of buying back around 375-400 before mid may. Wish me luck

[oda.krell]

It's what I believe is going to happen, so I went full fiat at 512 with the hope of buying back around 375-400 before mid may. Wish me luck

I'm sure I don't need to tell you this, but I hope you also set a stop-loss to buy back in. Decide, ahead of time, at which price you'll have to consider your previous assumptions to be proven wrong by the market, and then stick to it.

1d Ichimoku cloud comes to mind, or daily SMA200. But, whatever you pick, don't go back on your decision later unless you have extremely good reasons to do so.

[bucktotal]

taking a step back again, and looking at the longer-term trends in some indicators, it appears they have all flipped this past week 

[m3g4tr0n]

It's what I believe is going to happen, so I went full fiat at 512 with the hope of buying back around 375-400 before mid may. Wish me luck

I'm sure I don't need to tell you this, but I hope you also set a stop-loss to buy back in. Decide, ahead of time, at which price you'll have to consider your previous assumptions to be proven wrong by the market, and then stick to it.

1d Ichimoku cloud comes to mind, or daily SMA200. But, whatever you pick, don't go back on your decision later unless you have extremely good reasons to do so.

If it breaks 550 on stamp...


I like to stare at the stamp 6h chart right now because the resolution on my screen shows exactly 6 months. The descending fractal-ish downtrend since the ATH is bizarre in the way it that Jan-06 through Mar-03 looks identical to Mar-03 through Apr-15. My pattern recognition hard-wiring tells me we are in for a 3rd smaller one (also could be a total fallacy).

For Apr-15 thru May-20, if it does anything besides taking a bumpy little ride down to ~325 I will be surprised.

[oda.krell]

Hm. That escalated quickly. Looks like the 'extended triangle' suggestion from April 24 is becoming more likely.


Quick Fibo update:

I changed my view what the best way is to assign Fibo levels to the current uptrend. I'm now going from the April 13 low (397 USD) to the top (548 USD). Under that view, we get the following picture of retracements of the current uptrend:



We bounced off quite nicely from 62% (454 USD), but now it looks like 50% (472 USD) could act as resistance.

Based on 6h momentum alone, I suspect we get another leg down almost immediately, but if we bounce off of 62% again and break through 50% soon enough on a bit of volume, I can also see the potential of a (temporary) recovery back to ~480-490.


EDIT: 62% provided very little support. I expect we will eventually visit the next level, @430.

[JustAnotherSheep]

Hm. That escalated quickly. Looks like the 'extended triangle' suggestion from April 24 is becoming more likely.


Quick Fibo update:

I changed my view what the best way is to assign Fibo levels to the current uptrend. I'm now going from the April 13 low (397 USD) to the top (548 USD). Under that view, we get the following picture of retracements of the current uptrend:

(huge image)

We bounced off quite nicely from 62% (454 USD), but now it looks like 50% (472 USD) could act as resistance.

Based on 6h momentum alone, I suspect we get another leg down almost immediately, but if we bounce off of 62% again and break through 50% soon enough on a bit of volume, I can also see the potential of a (temporary) recovery back to ~480-490.


EDIT: 62% provided very little support. I expect we will eventually visit the next level, @430.

Another way of looking at it would be as this channel



(the upper line has the same starting point as the long December trendline, only set to ping at the most recent peak).

Looks to me like it's shaping up more and more like the previous stagnating cycle. The similarities are quite staggering. If so, then something like this should be the most likely short-term price development, before breaking down hard, possibly to $266~, or possibly to a bounce on $320~ (lowest trendline).



Time to set buy orders soon

[oda.krell]

Looks to me like it's shaping up more and more like the previous stagnating cycle. The similarities are quite staggering. If so, then something like this should be the most likely short-term price development, before breaking down hard, possibly to $266~, or possibly to a bounce on $320~ (lowest trendline).



Time to set buy orders soon

Agreed, mostly. But I wouldn't dismiss the possibility that we saw the bottom on April 11th, and are now grinding down to a (slightly) higher low, which will terminate the bear market more clearly.