Something, something, something, technical analysis

[JustAnotherSheep]

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.

Indeed, that is a possibility, but for the moment I'm choosing to take the more bearish outlook (until proven wrong).

[JustAnotherSheep]

Oh wow. I just realized my chart hadn't been set to log scale, and when I did it turns out the long term resistance line hasn't been broken at all



How incredibly nooby of me.

Yet, on linear many of the pings seem to be slightly more accurate Such as this (log)



vs this (linear)



Which should be used? Or are both valid?

[oda.krell]

Oh wow. I just realized my chart hadn't been set to log scale, and when I did it turns out the long term resistance line hasn't been broken at all



How incredibly nooby of me.

Yet, on linear many of the pings seem to be slightly more accurate Such as this (log)



vs this (linear)



Which should be used? Or are both valid?

hehehe, welcome to the discussion from 2 weeks ago. Forgot who was the first one to suggest using a log chart for the December downtrend... but I suspect the thought appeared to more people around the same time as the bear market stretched out.

I find the most plausible log downtrend right now not the one connecting to the ATH in December (like yours seems to do), but touching the peaks on January 6 and March 3. I get more points of contact like that. That's the upper bound of my "extended triangle" from the previous page.

EDIT: Here's an illustration of what I mean:

[oda.krell]

One more post on triangles (of doom), i.e. possible boundaries of a continuation of the downtrend that governed price action since early December (We're getting close to 5 months now. Quite the bear market, huh?)





(A) is the log trend line connecting the December ATH with the early January peak (near 1000). I don't consider it the most likely candidate for the main downtrend, for two reasons: a) too little points of contact, and b) price action has been too far away from the trendline for a long time, i.e. it's not only not touching the line, it's not even /near/ it for months now.

(B) is my main candidate for the upper bound of our downtrend. 3 points of contact, and price in general staying close to it to make it appear a relevant trend even at times when price doesn't touch the line.

(C) is the old lower boundary, the line through the 380-400 local bottoms. It's a log line as well, but only very weakly slopes upwards. That trendline was broken of course, on April 10/11, and again two days later, but it might still act as resistance. After all, we only closed one daily candle below it (another daily candle two days later is a borderline case), and we bounced off of it on decent volume, so you could argue the line was tested and held (sort of).

(D) is the log trendline between the 2013 ATH (at 266) and the current capitulation bottom (at 340). It is based on two assumptions a) 340 was indeed the final bottom (for which one can find independent reasons, such as the observation that we bounced off of the lower weekly Bollinger Band the week after the April 11 capitulation), and b) there is a very small (exponential) growth between the *high* of the previous bubble cycle and the final bottom of the *current* bubble cycle.

Taken together, those trendlines meet at 4 points:

(1) (Latest) Time of conclusion: Late May. Price point of conclusion: low to mid 400s. A possible candidate to mark the end of the December bear market. It would mean the 400 trendline held after all, but so does the more severe downtrend (B). Assuming it would  break out downwards, we would get to:

(2) Late June, mid 300s. My preferred candidate (EDIT: "preferred" as in: the most likely one) for a resolution of the bear market. It assumes the log line from previous ATH to current bottom holds, as does downtrend B, and once we hit the 300s again we might have enough force to finally break through B decisively.

(3) Early/Mid July, mid 400s. Assumes the 400 trendline holds now, but the B downtrend wasn't the relevant downtrend. Not very likely, in my opinion.

(4) Mid August, slightly below 400. The most dragged out consolidation triangle. Slightly more likely than scenario 3 I would say: it'd give the market a lot more time to take a "time out", without any major new price breakthroughs, neither up nor down. Think: No fresh fiat arriving for a long time, but the time for huge panic selling is over as well.

[windjc]

One more post on triangles (of doom), i.e. possible boundaries of a continuation of the downtrend that governed price action since early December (We're getting close to 5 months now. Quite the bear market, huh?)





(A) is the log trend line connecting the December ATH with the early January peak (near 1000). I don't consider it the most likely candidate for the main downtrend, for two reasons: a) too little points of contact, and b) price action has been too far away from the trendline for a long time, i.e. it's not only not touching the line, it's not even /near/ it for months now.

(B) is my main candidate for the upper bound of our downtrend. 3 points of contact, and price in general staying close to it to make it appear a relevant trend even at times when price doesn't touch the line.

(C) is the old lower boundary, the line through the 380-400 local bottoms. It's a log line as well, but only very weakly slopes upwards. That trendline was broken of course, on April 10/11, and again two days later, but it might still act as resistance. After all, we only closed one daily candle below it (another daily candle two days later is a borderline case), and we bounced off of it on decent volume, so you could argue the line was tested and held (sort of).

(D) is the log trendline between the 2013 ATH (at 266) and the current capitulation bottom (at 340). It is based on two assumptions a) 340 was indeed the final bottom (for which one can find independent reasons, such as the observation that we bounced off of the lower weekly Bollinger Band the week after the April 11 capitulation), and b) there is a very small (exponential) growth between the *high* of the previous bubble cycle and the final bottom of the *current* bubble cycle.

Taken together, those trendlines meet at 4 points:

(1) (Latest) Time of conclusion: Late May. Price point of conclusion: low to mid 400s. A possible candidate to mark the end of the December bear market. It would mean the 400 trendline held after all, but so does the more severe downtrend (B). Assuming it would  break out downwards, we would get to:

(2) Late June, mid 300s. My preferred candidate (EDIT: "preferred" as in: the most likely one) for a resolution of the bear market. It assumes the log line from previous ATH to current bottom holds, as does downtrend B, and once we hit the 300s again we might have enough force to finally break through B decisively.

(3) Early/Mid July, mid 400s. Assumes the 400 trendline holds now, but the B downtrend wasn't the relevant downtrend. Not very likely, in my opinion.

(4) Mid August, slightly below 400. The most dragged out consolidation triangle. Slightly more likely than scenario 3 I would say: it'd give the market a lot more time to take a "time out", without any major new price breakthroughs, neither up nor down. Think: No fresh fiat arriving for a long time, but the time for huge panic selling is over as well.

This is excellent analysis.

Of course this all assume 340 was/is the low.  Don't know how I feel about that. One thing I do know, is that there looks like there was a lot of disconnection between Houbi and the other exchanges in this last impulse down.

I think the China situation continues to be an albatross around the markets neck, however, the market looks pretty resilient right now. So much bullish sentiment. So either that sentiment keeps us afloat in the impending storm or that boat slowly springs a leak and sentiment finally turns bearish again.

Its almost a war right now against people refusing to sell and a market with no new buyers. I think who wins this war will determine whether your analysis holds or we see an entirely new form of bear market.

[Bitcoin_is_here_to_stay]

I think bears will prevail. Seems that miners may be forced to sell more soon and Bitfinex shows that there is still much more leveraged longs than shorts. With current price action at least some of these longs may be getting margin calls or simply cut losses. But agree that analysis was excellent .

[kodtycoon]

i really hope all you bears are wrong.. i was really hoping it starts a major trend up in the next week or so..

[Bitcoin_is_here_to_stay]

i really hope all you bears are wrong.. i was really hoping it starts a major trend up in the next week or so..

Well, Bitfinex stats show that actually there is few bears left now Not sure if it is a bearish or a bullish sign, though

[kodtycoon]

i really hope all you bears are wrong.. i was really hoping it starts a major trend up in the next week or so..

Well, Bitfinex stats show that actually there is few bears left now Not sure if it is a bearish or a bullish sign, though

sounds like a moon landing to me!

[lebing]

One more post on triangles (of doom), i.e. possible boundaries of a continuation of the downtrend that governed price action since early December (We're getting close to 5 months now. Quite the bear market, huh?)

As far as bearish scenarios goes, i would say it doesnt get an more clear than this. Good job.

[Wary]

One more reason for the line B: the peak 1163 was truncated, by a whale (that's why we had two peaks). If it wasn't truncated, it would be higher than 1163 and would probably touch the line B.

[oda.krell]

I'm not that impressed by our current recovery from the April 25 downwards move. We bounced off from 50% as clean as can be, are currently back to the area between 23% and 38% (i.e. the very first retracement step), and the first level, 23%, looks pretty perforated to me. Taking into account volume as well, I'm leaning towards a re-test of 43x.

[windjc]

I'm not that impressed by our current recovery from the April 25 downwards move. We bounced off from 50% as clean as can be, are currently back to the area between 23% and 38% (i.e. the very first retracement step), and the first level, 23%, looks pretty perforated to me. Taking into account volume as well, I'm leaning towards a re-test of 43x.

I think its better to look at Houbi, since that is the only exchange that currently matters.





Here we can see that it has tested the 38 Fib twice and been rejected. It looks more bearish than Bitstamp.

HOWEVER - WARNING - THIS IS HOUBI - which means a sudden test of the 50% Fib at around 2900 is very likely, imho.

[Bitcoin_is_here_to_stay]

One more post on triangles (of doom), i.e. possible boundaries of a continuation of the downtrend that governed price action since early December (We're getting close to 5 months now. Quite the bear market, huh?)

As far as bearish scenarios goes, i would say it doesnt get an more clear than this. Good job.

Why you call this scenario bearish? It is actually bullish (except short term) as it assumes that bottom has been reached already. I am actually not sure of this - that is, even more bearish.

[lebing]

One more post on triangles (of doom), i.e. possible boundaries of a continuation of the downtrend that governed price action since early December (We're getting close to 5 months now. Quite the bear market, huh?)

As far as bearish scenarios goes, i would say it doesnt get an more clear than this. Good job.

Why you call this scenario bearish? It is actually bullish (except short term) as it assumes that bottom has been reached already. I am actually not sure of this - that is, even more bearish.

bullish would be a fairly quick rebound to 700+.

[oda.krell]

I think its better to look at Houbi, since that is the only exchange that currently matters.

[...]

Here we can see that it has tested the 38 Fib twice and been rejected. It looks more bearish than Bitstamp.

HOWEVER - WARNING - THIS IS HOUBI - which means a sudden test of the 50% Fib at around 2900 is very likely, imho.

Agreed. The picture looks even a bit worse on Huobi than on Stamp.

But I don't buy the commonly repeated mantra "Only Huobi/China matters at the moment". Or rather: China might determine the price, but not in the way that people commonly imagine how it works.

If we had a complete, formal model of Bitcoin price discovery that includes a model of the separate but connected exchanges, then I would in fact fully expect that one of the results of that model would be something like "current price is determined to a larger degree by China than by, say, Bitstamp".

But that's /not/ the same as saying "Huobi determines the price, then the rest of the world follows it". The process is, imo, more complex than this, and in reality involves a mutual exchange of information between the exchanges as trading takes place.

The only clear cut case of China really setting the price that others follow is through arbitrage bots, but arbitrage is (obviously) not what determines the current price level in the first place.

Where I'm getting with this:

I don't believe there is a simple leading/following division between the exchanges, except for a few individual movements, and it is perfectly possible to read the trends on either of the exchanges.

In fact, I consider many signals to be better visible on Bitstamp than on Huobi, perhaps because of a worse signal/noise ratio on Huobi that has at least a doubtful amount of volume. I explain it to myself (this is pure conjecture now of course) by noting that human traders ultimately determine the price level, but that human trading is nearly drowned out on the Chinese exchanges during most of the day through automated trading.


To be clear, I don't dismiss Huobi for getting short-term signals, but (a) I believe I can read all the relevant signals (above, say, hourly time frame) from Bitstamp data, because price is highly correlated across the exchanges, and (b) because of the high volume of unclear origin on Huobi, it is perhaps actually better not to rely on Huobi data too much for analysis.

[Bitcoin_is_here_to_stay]

I think its better to look at Houbi, since that is the only exchange that currently matters.

[...]

Here we can see that it has tested the 38 Fib twice and been rejected. It looks more bearish than Bitstamp.

HOWEVER - WARNING - THIS IS HOUBI - which means a sudden test of the 50% Fib at around 2900 is very likely, imho.

Agreed. The picture looks even a bit worse on Huobi than on Stamp.

But I don't buy the commonly repeated mantra "Only Huobi/China matters at the moment". Or rather: China might determine the price, but not in the way that people commonly imagine how it works.

If we had a complete, formal model of Bitcoin price discovery that includes a model of the separate but connected exchanges, then I would in fact fully expect that one of the results of that model would be something like "current price is determined to a larger degree by China than by, say, Bitstamp".

But that's /not/ the same as saying "Huobi determines the price, then the rest of the world follows it". The process is, imo, more complex than this, and in reality involves a mutual exchange of information between the exchanges as trading takes place.

The only clear cut case of China really setting the price that others follow is through arbitrage bots, but arbitrage is (obviously) not what determines the current price level in the first place.

Where I'm getting with this:

I don't believe there is a simple leading/following division between the exchanges, except for a few individual movements, and it is perfectly possible to read the trends on either of the exchanges.

In fact, I consider many signals to be better visible on Bitstamp than on Huobi, perhaps because of a worse signal/noise ratio on Huobi that has at least a doubtful amount of volume. I explain it to myself (this is pure conjecture now of course) by noting that human traders ultimately determine the price level, but that human trading is nearly drowned out on the Chinese exchanges during most of the day through automated trading.


To be clear, I don't dismiss Huobi for getting short-term signals, but (a) I believe I can read all the relevant signals (above, say, hourly time frame) from Bitstamp data, because price is highly correlated across the exchanges, and (b) because of the high volume of unclear origin on Huobi, it is perhaps actually better not to rely on Huobi data too much for analysis.

I am also leaning to analyse primarily Huobi these days, volume on Stamp is so abysmal, sometimes the trading simply dies there or there are only miniscule transactions, just noise. BTW, price on Huobi and Stamp almost exactly equal now - imho, looks like arbitrage works.

EDIT: I have just noticed that Bitcoinwisdom's price on Huobi is more than 2 hours old. Anyone knows what is going on? Is the problem on Huobi's or Bitcoinwisdom's part? Cannot find anything in the news 

[voluntarist500]

excellent. bump.

[UglyTroll]

Houbi will be gone in days, it's funny people still talk about it, what's the point 

[oda.krell]

Let's have a quick look at daily Ichimoku clouds, shall we?

I'm still learning the basics of it, and a part of me remains skeptic about the premises of it, mainly: the 26 day "projection" of the cloud, which seems to be based on the assumption? observation? that all markets react with a ~26 day delay... it's an interesting idea, but the skeptic in me wants to see some data on that assumption.

Anyway, here's a pattern that seems to unfold similarly now as it did about 2 weeks ago (EDIT) sorry, 6 weeks ago, around March 24:



Price drifts into the cloud (which is a prerequisite of reversing, i.e. closing above the cloud), shortly after the conversion line sees a bearish crossover with the base line (i.e. the fast average falls below the slow one), together with a delayed upwards 'jump' of the base line, which is, if I read this indicator correctly, the delayed effect (through the slower moving average of the base line) of the rally we saw around April 15 (i.e. the one that took from 340 to 550).

Note that the last time this happened, in March, price got near the base line, but failed to break through it, spent a few days (3 to 4) in the lower part of the cloud, then decisively fell out of it. My interpretation is (I am for the moment following the "delay" assumption implicit in Ichimoku analysis) that the move *into* the cloud (which can look like a bullish breakout attempt) is triggered by a delayed market reaction to the rally from about a month ago. The next necessary step however is breaking through resistances, at first the base line, then the cloud itself. Failure to do so within a few days is seen by the market as a rejection of the attempt, and leads to a sharp drop.

Applied to the current situation, we would like to see reaching the base line at ~472 today or tomorrow. That base line will inevitable fall somewhat within the next days (because the April uptrend was followed by a correction), so within the days that follow we will either see price staying above the base line, and inside the cloud (in which case we could make the case that a reversal is really underway this time), or price will fall together with the base line like it did in March, which probably means we will see another capitulation-like event.