Tone Vays Is 85% Certain Bitcoin (BTC) Hasn’t Hit True Bottom

[Wind_FURY]

I think Tone is right and we are still not bottomed but we are near capitulation. The sub $1000 prices will be the obligatory group of people that are too pessimistic and are always around on every bear market and they get it wrong.

Capitulation doesn't have to play out in the way people think it has to play out. The more convinced most people are for something to happen, the more convinced I am that it will not happen.

It doesn't need to happen, but it probably will. Mt Gox had historically high weekly volume at the November 2011 bottom. The same goes for Bitfinex/Bitstamp at the January 2015 bottom. I've always loved Bitcoin for its V-bottoms.

"Past performance is no guarantee of future results". It might, but maybe with some differences. It's maybe the reason why many technical day traders lose their money. Haha.

I don't think everyone is waiting for capitulation, judging by the way Bitfinex shorts have dropped in half over the past month. I'm still hoping for another leg up to test the 20-week MA and horizontal resistance in the $5,000s but it's chop city right now. This can go either way, but I'm not loving the look of trader commitments
right now.

Didn't capitulation already happen?

[figmentofmyass]

Didn't capitulation already happen?

i would say "no" for two reasons.

1. capitulation is usually characterized by very high volume at the bottom. it's the final flush of weak hands. we didn't see particularly high volume in december (compared to early 2018), and the bulk of the volume didn't occur at the bottom.

2. the lack of recovery. this is what i'm looking for after a real capitulation:


https://www.investopedia.com/terms/c/capitulation.asp

[deisik]

Didn't capitulation already happen?

i would say "no" for two reasons.

1. capitulation is usually characterized by very high volume at the bottom. it's the final flush of weak hands. we didn't see particularly high volume in december (compared to early 2018), and the bulk of the volume didn't occur at the bottom.

2. the lack of recovery. this is what i'm looking for after a real capitulation:


https://www.investopedia.com/terms/c/capitulation.asp

So you basically think it didn't happen because there was no major reversal?

I was closely following Bitcoin prices at Bitfinex when the last crash happened and prices went vertically down from +5k to almost 3k. The volumes were huge in the 3k-4k range like 500M daily. Compare this to measly 40M on average we see today (38M at the moment). So what we saw in early December looked exactly like "the final flush of weak hands" whatever was left of them after a year of a downhill journey. In other words, you can't compare the December volumes with the early 2018 numbers, and we in fact saw the reversal but you just need to zoom in (read, forget about 6k, 7k, 10k, and so on for the time being)

[figmentofmyass]

Didn't capitulation already happen?

i would say "no" for two reasons.

1. capitulation is usually characterized by very high volume at the bottom. it's the final flush of weak hands. we didn't see particularly high volume in december (compared to early 2018), and the bulk of the volume didn't occur at the bottom.

2. the lack of recovery. this is what i'm looking for after a real capitulation:


https://www.investopedia.com/terms/c/capitulation.asp

So you basically think it didn't happen because there was no major reversal?

low volume + lack of reversal candles. from the link above, emphasis mine:

Hammer candles often form at the end of a selling frenzy when the lowest price is made, as capitulation sets in and signals a price bottom followed by a reversal bounce on heavy volume.

I was closely following Bitcoin prices at Bitfinex when the last crash happened and prices went vertically down from +5k to almost 3k. The volumes were huge in the 3k-4k range like 500M daily.

on the day the bottom was made, bitfinex did 16.36k BTC volume (according to wisdom) or 17.89k BTC volume (according to tradingview). that's closer to $50-60M.

again, volumes were paltry compared to the february 2018 bottom---and that's in BTC terms. when you account for USD equivalent volume (due to the drop from $6k to $3k), the december volume looks tiny.

by no possible metric was it a high volume reversal.

Compare this to measly 40M on average we see today (38M at the moment). So what we saw in early December looked exactly like "the final flush of weak hands" whatever was left of them after a year of a downhill journey. In other words, you can't compare the December volumes with the early 2018 numbers

your conclusion doesn't follow from the premise.

i'm comparing volume to past capitulation bottoms. you're comparing it to low volume lulls. why?

[deisik]

i'm comparing volume to past capitulation bottoms. you're comparing it to low volume lulls. why?

Because that's the crux of the matter!

It doesn't look like perfectly justified to compare this "reversal" to past reversals. How come? Because "past performance is not an indicator of future outcomes" (or some variation thereof). Basically, you are judging things in retrospect, i.e. you look at past reversals which were in thousands of dollars (and sometimes in many thousands), and this reversal doesn't look like a reversal at all to you. Truth be told, it doesn't look like a reversal even to my own eyes, so I'm kinda with you on this

Now try to gauge the price dynamics taking into account the possibility that we may be stuck in this range (say, 3k-4k) for years to come. In fact, that would be a pretty volatile range for the total majority of commodities, most blue chips as well as government bonds (e.g. treasuries). So how are you going to look at this rebound other than a major reversal? In other words, things should be assessed from a correct perspective. The one based on past performance is definitely not the right one in this market

[el kaka22]

You can look at the charts and use either the past low volumes or you can use the past bottoms and no matter what you use in the end none of it will matter in bitcoin since it will only react to big things and not the charts. You think bitcoin dropped from 20 thousand to 4 thousand dollars because of some chart indicator showing it should ?

Look at all the people 2 months ago that said bitcoin was bound to go up from 6.5 thousand dollars, every chart I saw here was telling me how it should be going up really soon. Then what happened ? Bitcoin cash war happened and the price is now at 4 thousand even lower prices. Hence, it can go up or it go lower but in the end whatever happens it will happen not because charts but because something big happened, either going down because some bad news or going up because some good news but in the end it will move according to them.

[deisik]

You can look at the charts and use either the past low volumes or you can use the past bottoms and no matter what you use in the end none of it will matter in bitcoin since it will only react to big things and not the charts. You think bitcoin dropped from 20 thousand to 4 thousand dollars because of some chart indicator showing it should ?

Look at all the people 2 months ago that said bitcoin was bound to go up from 6.5 thousand dollars, every chart I saw here was telling me how it should be going up really soon. Then what happened ? Bitcoin cash war happened and the price is now at 4 thousand even lower prices. Hence, it can go up or it go lower but in the end whatever happens it will happen not because charts but because something big happened, either going down because some bad news or going up because some good news but in the end it will move according to them.

Personally, I don't think that the crash was due to Bitcoin Cash hash wars

Though it might in fact have been the trigger. Anyway, if it were the real cause, we would have already been back to prewar levels as both chains are now completely irrelevant (good riddance to both of them). And as we didn't return to those levels and far from that, we can safely conclude that the Bitcoin Cash showdown impact on prices was negligible on its own (unless its perpetrators were dumping bitcoins, of course). Basically, we just continued to spiral down after a stop at 6.5k. We most likely would have crashed even without the Bitcoin Cash controversy springing up

[Wind_FURY]

i'm comparing volume to past capitulation bottoms. you're comparing it to low volume lulls. why?

Because that's the crux of the matter!

It doesn't look like perfectly justified to compare this "reversal" to past reversals. How come? Because "past performance is not an indicator of future outcomes" (or some variation thereof). Basically, you are judging things in retrospect, i.e. you look at past reversals which were in thousands of dollars (and sometimes in many thousands), and this reversal doesn't look like a reversal at all to you. Truth be told, it doesn't look like a reversal even to my own eyes, so I'm kinda with you on this

Now try to gauge the price dynamics taking into account the possibility that we may be stuck in this range (say, 3k-4k) for years to come. In fact, that would be a pretty volatile range for the total majority of commodities, most blue chips as well as government bonds (e.g. treasuries). So how are you going to look at this rebound other than a major reversal? In other words, things should be assessed from a correct perspective. The one based on past performance is definitely not the right one in this market

I believe that it's becoming like a game between the market participants trying to out-smart the market. Many of the people who got in Bitcoin from 2014 to 2018 have already become wiser traders. They might have anticipated that the majority might have also become wiser traders too.

Then the wisest of the wiser traders might have also thought that, because everyone is just waiting for the "capitulation", they might as well be first in line now, and start buying. No need to wait! Haha.

[deisik]

i'm comparing volume to past capitulation bottoms. you're comparing it to low volume lulls. why?

Because that's the crux of the matter!

It doesn't look like perfectly justified to compare this "reversal" to past reversals. How come? Because "past performance is not an indicator of future outcomes" (or some variation thereof). Basically, you are judging things in retrospect, i.e. you look at past reversals which were in thousands of dollars (and sometimes in many thousands), and this reversal doesn't look like a reversal at all to you. Truth be told, it doesn't look like a reversal even to my own eyes, so I'm kinda with you on this

Now try to gauge the price dynamics taking into account the possibility that we may be stuck in this range (say, 3k-4k) for years to come. In fact, that would be a pretty volatile range for the total majority of commodities, most blue chips as well as government bonds (e.g. treasuries). So how are you going to look at this rebound other than a major reversal? In other words, things should be assessed from a correct perspective. The one based on past performance is definitely not the right one in this market

I believe that it's becoming like a game between the market participants trying to out-smart the market. Many of the people who got in Bitcoin from 2014 to 2018 have already become wiser traders. They might have anticipated that the majority might have also become wiser traders too

I had been raising a similar question a few years ago. My point was that in due course weak hands eventually get shaken out, and this inevitably leads to a stronger competition between the remaining market participants, the smarter ones. In this manner, it is not so much about becoming smarter or wiser (as most people are simply not capable of this feat) as about "natural selection" when only the smartest remain in this market at the end of the day

And it looks like we are pretty close to that "singularity event"

[Wind_FURY]

i'm comparing volume to past capitulation bottoms. you're comparing it to low volume lulls. why?

Because that's the crux of the matter!

It doesn't look like perfectly justified to compare this "reversal" to past reversals. How come? Because "past performance is not an indicator of future outcomes" (or some variation thereof). Basically, you are judging things in retrospect, i.e. you look at past reversals which were in thousands of dollars (and sometimes in many thousands), and this reversal doesn't look like a reversal at all to you. Truth be told, it doesn't look like a reversal even to my own eyes, so I'm kinda with you on this

Now try to gauge the price dynamics taking into account the possibility that we may be stuck in this range (say, 3k-4k) for years to come. In fact, that would be a pretty volatile range for the total majority of commodities, most blue chips as well as government bonds (e.g. treasuries). So how are you going to look at this rebound other than a major reversal? In other words, things should be assessed from a correct perspective. The one based on past performance is definitely not the right one in this market

I believe that it's becoming like a game between the market participants trying to out-smart the market. Many of the people who got in Bitcoin from 2014 to 2018 have already become wiser traders. They might have anticipated that the majority might have also become wiser traders too

I had been raising a similar question a few years ago. My point was that in due course weak hands eventually get shaken out, and this inevitably leads to a stronger competition between the remaining market participants, the smarter ones. In this manner, it is not so much about becoming smarter or wiser (as most people are simply not capable of this feat) as about "natural selection" when only the smartest remain in this market at the end of the day

And it looks like we are pretty close to that "singularity event"

Or the "weak hands" might have also become wiser, and will not be easily shaken out anymore. Which makes for a stronger debate that the "wisest of the wiser traders" who anticipated it, would want to stay ahead, and would not wait for a "capitulation".

[deisik]

I had been raising a similar question a few years ago. My point was that in due course weak hands eventually get shaken out, and this inevitably leads to a stronger competition between the remaining market participants, the smarter ones. In this manner, it is not so much about becoming smarter or wiser (as most people are simply not capable of this feat) as about "natural selection" when only the smartest remain in this market at the end of the day

And it looks like we are pretty close to that "singularity event"

Or the "weak hands" might have also become wiser, and will not be easily shaken out anymore. Which makes for a stronger debate that the "wisest of the wiser traders" who anticipated it, would want to stay ahead, and would not wait for a "capitulation"

Personally, I don't think things are all that simple

From my perspective, it is a wrong approach as such, or wrong frame of reference if you please, to think in terms of "capitulation". As I wrote in one of my previous posts, if this market is to stay with us for long, say, like 2-3 years (or even if for just a few months), the terms like capitulation, bottom, major reversal are all going to lose any useful meaning. Basically, it is going to turn into nonstop bloodbath, with no regular bears or bulls but only with dogs in the pit

Apart from that, I don't say that a few weak hands couldn't and didn't in fact turn into strong ones over time as some certainly did. I'm talking about a bigger picture, obviously, where many common people lost their money and left for good. But I agree either it is the departure of weak hands or weak hands turning into strong ones, the competition became stronger while the market as a whole more ruthless and less forgiving (let's call it more "professional")

[cellard]

Capitulation could have already happened when we dropped from $6k after hoovering for a while in there all the way down to $3k. Solid big red candle, good volume, and it happened after a while of being stable.

Bottoms happen when it's too late to realize that they happened, this is how the new FOMO cycles are created. There's people always waiting for lower prices that never come, then they realize they will never come, and all of them becoming panic buyers or accumulators at market prices.

[pooya87]

Capitulation could have already happened when we dropped from $6k after hoovering for a while in there all the way down to $3k. Solid big red candle, good volume, and it happened after a while of being stable.

Bottoms happen when it's too late to realize that they happened, this is how the new FOMO cycles are created. There's people always waiting for lower prices that never come, then they realize they will never come, and all of them becoming panic buyers or accumulators at market prices.

exactly what i always say.
and in addition to that, we always have the manipulators hard at work in the market at times when big drops are happening. if you watch the market during the recoveries when the chart is trying to form the same thing as the picture that was posted above, you can see how they are "suppressing" the recovery but making large dumps easily noticeable by big sells instead of being multiple small sells by multiple traders.

[deisik]

Capitulation could have already happened when we dropped from $6k after hoovering for a while in there all the way down to $3k. Solid big red candle, good volume, and it happened after a while of being stable.

Bottoms happen when it's too late to realize that they happened, this is how the new FOMO cycles are created. There's people always waiting for lower prices that never come, then they realize they will never come, and all of them becoming panic buyers or accumulators at market prices.

Bottoms definitely happen but not like that

They are not like a flat bottom at all (as the word suggests) since they are more like the Mariana Trench with a long, lonely red stick piecing support for a few minutes, maybe hours (this is how capitulation looks). If we see a bottom like this (and like the one we saw in September and October), it may prove to be a false bottom. Anyway, if your estimations were correct, we wouldn't be stuck in the current range of 3-4k for so many days. As much as I hope to be wrong, I have a feeling that these prices are to stay for longer than we expect

[STT]

The trader I've followed for ten years says, you will be forced out or you will be worn out.      Its a quick way of referencing margin calls but also time limits to peoples involvement.   When people talk about capitulation they are ignoring the idea also of a market correction over time also.    This is the boring and slow form of capitulation where people lose the thread of that market because they lose interest and drop out, that doesnt even make them sellers exactly but usually means they are not using BTC as a product

We are most likely to have a corrective market over time, probably years I guess.   This could be the bottom but over time theory would say we really dont rise much for over 12 months from now so we just go sideways and in this way we outlast the negative trend by just staying in a holding pattern.

This is my view of what happened on the previous big rise which was 2013 into start 2014, it went down but mostly it just drifted for a long time.    It wore out the bears as well as alot of speculators, going quiet I hope is still something BTC can do like a nuclear submarine just keep on going anyway

[cellard]

Capitulation could have already happened when we dropped from $6k after hoovering for a while in there all the way down to $3k. Solid big red candle, good volume, and it happened after a while of being stable.

Bottoms happen when it's too late to realize that they happened, this is how the new FOMO cycles are created. There's people always waiting for lower prices that never come, then they realize they will never come, and all of them becoming panic buyers or accumulators at market prices.

Bottoms definitely happen but not like that

They are not like a flat bottom at all (as the word suggests) since they are more like the Mariana Trench with a long, lonely red stick piecing support for a few minutes, maybe hours (this is how capitulation looks). If we see a bottom like this (and like the one we saw in September and October), it may prove to be a false bottom. Anyway, if your estimations were correct, we wouldn't be stuck in the current range of 3-4k for so many days. As much as I hope to be wrong, I have a feeling that these prices are to stay for longer than we expect

Yes, I was talking about how after a big red dildo like the one we say from $6k to $3k, it comes a very ong period of a stable-ish (in Bitcoin terms) price. We've already had the %85-ish correction we needed, anything lower than that is just pretty dumb and I may consider buying as it starts getting into the unreasonably cheap ranges.

Then given by past precedents, I don't expect ATH until around 2021. Of course new fundamentals like Bakkt can make it go to the moon if massive institutional pockets start buying.

[exstasie]

The trader I've followed for ten years says, you will be forced out or you will be worn out.      Its a quick way of referencing margin calls but also time limits to peoples involvement.   When people talk about capitulation they are ignoring the idea also of a market correction over time also.    This is the boring and slow form of capitulation where people lose the thread of that market because they lose interest and drop out, that doesnt even make them sellers exactly but usually means they are not using BTC as a product

Honestly, I think we're looking for both. If you look back to 2015, we saw market capitulation in January: mass panic selling, nearly 50% decline over a few days, nearly record volumes, and a very swift recovery after the final low.

Then came a 9-month long quiet accumulation period where price was volatile but remained sideways, which preceded the 2016+ bull market.

I've always understood the word "capitulation" to mean the mass selloff phase. The "despair" phase is the quiet period that comes after, where most everyone has already sold and given up on the market.

[figmentofmyass]

i'm comparing volume to past capitulation bottoms. you're comparing it to low volume lulls. why?

Because that's the crux of the matter!

It doesn't look like perfectly justified to compare this "reversal" to past reversals. How come? Because "past performance is not an indicator of future outcomes" (or some variation thereof). Basically, you are judging things in retrospect, i.e. you look at past reversals which were in thousands of dollars (and sometimes in many thousands), and this reversal doesn't look like a reversal at all to you. Truth be told, it doesn't look like a reversal even to my own eyes, so I'm kinda with you on this

"past performance is not an indicator of future outcomes" refers to predictions about future performance. that's not relevant here. my point is about whether capitulation occurred according to discrete conditions. i've been referring to "capitulation" in the technical sense (see earlier link), which is indicated by high volume. "high volume" is a relative term that requires comparison to other similar events (major bottoms), otherwise it has no meaning. there is no prediction about future performance here, just comparisons to establish whether "high volume" actually occurred. re: the december bottom, it clearly didn't, by any possible metric. you need to cherry-pick and omit past samples in order to call december a "high volume" bottom.

discounting the february 2018 bottom is short-sighted for that reason. it took much, much more buying volume to establish that long term bottom than december. that's the underlying logic here: we're looking for huge volume to signify that everyone who plans to sell has sold. that's why the february bottom held for so long. sellers were completely exhausted.

Now try to gauge the price dynamics taking into account the possibility that we may be stuck in this range (say, 3k-4k) for years to come. In fact, that would be a pretty volatile range for the total majority of commodities, most blue chips as well as government bonds (e.g. treasuries). So how are you going to look at this rebound other than a major reversal? In other words, things should be assessed from a correct perspective. The one based on past performance is definitely not the right one in this market

in other words, "this time it's different" aka the most dangerous words in investing, lol. i don't have any interest in predicting what's going to happen the next few years. i do have an interest in observing when a capitulation bottom has occurred, because the subsequent rally is usually very profitable (unlike the recent bounce off the $3100s).

[Dogboy714]

What is your target for catching the knife? Or will you be going strictly off volume?

[deisik]

Capitulation could have already happened when we dropped from $6k after hoovering for a while in there all the way down to $3k. Solid big red candle, good volume, and it happened after a while of being stable.

Bottoms happen when it's too late to realize that they happened, this is how the new FOMO cycles are created. There's people always waiting for lower prices that never come, then they realize they will never come, and all of them becoming panic buyers or accumulators at market prices.

Bottoms definitely happen but not like that

They are not like a flat bottom at all (as the word suggests) since they are more like the Mariana Trench with a long, lonely red stick piecing support for a few minutes, maybe hours (this is how capitulation looks). If we see a bottom like this (and like the one we saw in September and October), it may prove to be a false bottom. Anyway, if your estimations were correct, we wouldn't be stuck in the current range of 3-4k for so many days. As much as I hope to be wrong, I have a feeling that these prices are to stay for longer than we expect

Yes, I was talking about how after a big red dildo like the one we say from $6k to $3k, it comes a very ong period of a stable-ish (in Bitcoin terms) price. We've already had the %85-ish correction we needed, anything lower than that is just pretty dumb and I may consider buying as it starts getting into the unreasonably cheap ranges

And I'm talking about the same

If it was a true "bottom", it wouldn't look like a bottom at all (e.g. like a seabed). It would be like a "big red dildo" with an almost instant and powerful rebound. But what we saw in late November and early December looked more like a hydraulic press crushing the prices without any genuine rebound. So while it definitely looks like a bottom, it may not be the one in the trading sense of the word (read, we have yet to see that "big red dildo")

Then given by past precedents, I don't expect ATH until around 2021. Of course new fundamentals like Bakkt can make it go to the moon if massive institutional pockets start buying

I'm skeptical about any ATH's in the foreseeable future (other than local ones, of course)