Arepo's Weekly Newsletter Discussion and Analysis

[arepo]

so far, we've been following scenario b from my last post. the daily-scale Chaikin Oscillator has continued to flatten. the 12-hour Chaikin Money Flow has peaked. the 12-hour red ADX line has peaked. and the daily William's Oscillator is tracing out the inverted head-and-shoulders.

however, the daily RSI has decisively dipped below the 40-line, and the daily MACD shows a definitive bearish crossover.

all things considered, bid support looks strong again, and price action since the $541 low has been bullish, with a micro-scale bullish breakout up to $570 after the initial consolidation. i still have confidence in scenario b, and i'm pleased at the accuracy and precision of the 3rd target from page 10 ($540!). predictions become more and more divorced from the data set from which they were derived as the week goes on, so to see corroborating price action to such precision on Saturday is very satisfying. anyway, as it is already Sunday i'm going to save all of the juicy details of our current situation for tomorrow

@oda.krell -- i see what you mean about our differing styles. both can be quite effective if done properly. because my techniques produce falsifiable models, i like to make a solid prediction, get into position, close the position with minimal loss in the case of a falsifying signal, or close the position at my leisure as the market follows through. although sometimes i front-run the market too much and there is some non-falsifying counter-prediction behavior that incurs a loss that i am forced to hold for uncomfortable periods of time before becoming profitable

trend-following is the opposite. you wait for a clear signal from the indicators instead of attempting to extrapolate, but the indicator data, as a rule, lags price and volume data. in this way, you run the risk of being too slow to get into position, and you are forced to determine whether or not you have missed the trend or if there remains profitable price action to be seen after already getting into position. in other words, you assume your position at a point of price instability by design, which is not something i'm comfortable with. by front-running the market, i usually can manage to assume my positions during periods of stability, and exit them as volatility and risk start to climb.

seeing price behavior in terms of trends is also a little problematic, IMHO. you talk about how downtrends are visible on many scales in the price data right now, but they are punctuated with periods of large price gains. the real "shape" of the price data in the past 4 months is an oscillation pattern, bounded by a support and resistance, not just a handful on interrelated downtrends. also, we're getting very close to the narrow part of this shape, which is precisely when price action historically diverges from these bounds, or "breaks trend". anyway, i tend not to focus on possible "trends" and when i notice a roughly linear increasing support, for instance, i call it a "moving support", as i'm sure you know from the newsletter. this pattern is more generalizeable than a trend as it also appears in indicator data.

---

also, Blue just signed on to the subscription service! thanks for supporting my work, and i hope others may see this thread and judge the quality and accuracy for themselves. PM me if you're interested in signing on before tomorrow's newsletter gets sent out!

--arepo

[1714173932]

1714173932

[1714173932]

1714173932

[1714173932]

1714173932

[arepo]

this week's issue was just sent out to the following users:

oda.krell
docile
John999
kramerc
iron77
kwest
jlin
CoinBurner
Aquatic
Blue
Ultros
Roger_Murdock
rushthatspeaks

enjoy!

edit: to my two new subscribers, i'd just like to remind you that if you have any questions or comments feel free to post them here in this thread. i want to make this service as comprehensive as possible, and i know that this issue contains some math and/or technicals that some may not be familiar with.

--arepo

[Ultros]

edit: to my two new subscribers, i'd just like to remind you that if you have any questions or comments feel free to post them here in this thread. i want to make this service as comprehensive as possible, and i know that this issue contains some math and/or technicals that some may not be familiar with.

In fact, that was much clearer and understandable than I first thought it would be. You keep it straight and limpid. So far so good.

I particularly liked your all-time RSI analysis. Keep up the good work!

[arepo]

edit: to my two new subscribers, i'd just like to remind you that if you have any questions or comments feel free to post them here in this thread. i want to make this service as comprehensive as possible, and i know that this issue contains some math and/or technicals that some may not be familiar with.

In fact, that was much clearer and understandable than I first thought it would be. You keep it straight and limpid. So far so good.

I particularly liked your all-time RSI analysis. Keep up the good work!

i'm glad you received it well! thanks for posting your feedback.

i'd like to announce that, since we added quite a handful of new subscribers last week, i'm going to start to republish past issues of the newsletter by request. since the publication is meant not only to provide price projections and analysis, but also generally inform your trading and analytic skills, past issues may be of value to the newer subscribers. please PM me if you did not, but would like to receive any of the following issues:

AWN -- Week of 10 March
AWN -- Week of 17 March
AWN -- Week of 24 March

the backlog will also be available to all new subscribers! simply sign up for a subscription, and you will unlock access to as many past issues of Arepo's Weekly Newsletter as you have paid in advance for. currently, there are 13 issues left, with the publication set to run up to and including the week of 23 June.

--arepo

[CoinBurner]

Thank you very much for your analysis! I enjoyed a lot the first two newsletters, especially the non-standard approach to market analysis using oscillators etc...
This last one is excellent, in particularly the RSI correction concept is just brilliant - I suppose it's an original idea of yours, since I've never seen such a methodology applied to explain the exponential adoption dynamics in a classical TA framework.
Still, I'm looking at that looming triangle in figure 1 and I can't help feeling the bear is still alive
Also it seems to me right now a consistent part of the analysts out there (especially EW people) are calling for "at least" a major retest of the lows, if not a lower low, with quite convincing technical arguments.
Could be very well a contrarian indicator of course... I guess we will see, the next few weeks are going to be exciting to say the least!!

[arepo]

Thank you very much for your analysis! I enjoyed a lot the first two newsletters, especially the non-standard approach to market analysis using oscillators etc...
This last one is excellent, in particularly the RSI correction concept is just brilliant - I suppose it's an original idea of yours, since I've never seen such a methodology applied to explain the exponential adoption dynamics in a classical TA framework.
Still, I'm looking at that looming triangle in figure 1 and I can't help feeling the bear is still alive
Also it seems to me right now a consistent part of the analysts out there (especially EW people) are calling for "at least" a major retest of the lows, if not a lower low, with quite convincing technical arguments.
Could be very well a contrarian indicator of course... I guess we will see, the next few weeks are going to be exciting to say the least!!

thanks very much for the kind words! the "bias function" derivation is original, yes, and still quite rough. i'm glad you enjoy my alternative methodologies -- my academic background is primarily in physics and mathematics, and i have relied on research, insight and empiricism, and hypothesis and test, to form the foundation of my technical knowledge and interpretations. whether or not the price action follows through as projected will be the real test of that particular hypothesis

i know i have been the odd one out in maintaining a cautious bullish stance, but there are quite a few factors that are simply inconsistent with the doom and gloom that seems to be the consensus. that said, there is some data that fully supports a retest of the established supports, but it's been difficult for me to find evidence for the kind of paradigm shift necessary to bring us to lower lows -- it simply has never occurred after the kind of pattern we've been tracing out in the past four months. in the very first issue of the newsletter, the opening argument was one which compared the shape of the present pattern to that of the price behavior after the April bubble, and the proportionality is significant. this suggests, to me, that we should not expect anything out of the ordinary, and certainly not a new-paradigm bear market.

i will be continuing to collect data, and price behavior this week will hopefully tip the balance decisively in favor of a clear model for breakout direction, which will be featured in the next issue.

--arepo

[oda.krell]

I would say there's more and more evidence now that we have to look into the larger triangle for support from now. Which would also mean, another month (approximately) of sideways/downwards movement.

[arepo]

I would say there's more and more evidence now that we have to look into the larger triangle for support from now. Which would also mean, another month (approximately) of sideways/downwards movement.

i'd mostly agree. what is most troubling is that we broke under the $530 support, and are now consolidating in a very bearish flag pattern directly below it:


https://i.imgur.com/n5Th6u4.png

while i still don't see us retesting $400, there is little price action between these two price points to help determine what kinds of supports we can expect. i have to say this took me a little by surprise. do you think that the "china ban panic" on the forums contributed to the severity of this movement?

[oda.krell]

I would say there's more and more evidence now that we have to look into the larger triangle for support from now. Which would also mean, another month (approximately) of sideways/downwards movement.

i'd mostly agree. what is most troubling is that we broke under the $530 support, and are now consolidating in a very bearish flag pattern directly below it:

[...]

while i still don't see us retesting $400, there is little price action between these two price points to help determine what kinds of supports we can expect. i have to say this took me a little by surprise. do you think that the "china ban panic" on the forums contributed to the severity of this movement?

Good observation on the smaller bearish flag.

I'd say the 'china ban' panic helped trigger what we see now, but is not the cause. I still see a severe lack of consistent buying pressure at this price level. Sure, there are short bursts when we touch the lower levels of support, but in between volume and price action is nothing that inspires confidence in this level (>500) in my opinion. Daily CMF confirms that view, I'd say, it's not comparably at all to mid July 2013 when we turned around for good last time... actually, it starts looking like June 2013, right before the final leg down.

[arepo]

while i still don't see us retesting $400, there is little price action between these two price points to help determine what kinds of supports we can expect. i have to say this took me a little by surprise. do you think that the "china ban panic" on the forums contributed to the severity of this movement?

Good observation on the smaller bearish flag.

I'd say the 'china ban' panic helped trigger what we see now, but is not the cause. I still see a severe lack of consistent buying pressure at this price level. Sure, there are short bursts when we touch the lower levels of support, but in between volume and price action is nothing that inspires confidence in this level (>500) in my opinion. Daily CMF confirms that view, I'd say, it's not comparably at all to mid July 2013 when we turned around for good last time... actually, it starts looking like June 2013, right before the final leg down.

i figured that the recent bullish action was a "bulltrap", for what it was worth, because we did not have the necessary volume to overcome the askwalls on bitstamp, and FIGURE 1 from this week's issue still showed a little bit more of consolidation space before a breakout, but to move nearly straight down from the upper resistance straight through an important month-scale support, all within 18 or so hours!

the daily-scale CMF and MACD do both look pretty grim now. i expect more downward movement from here, possibly to as low as $400. i'm not too sure about your comparison to June 2013, though, as the "factor 3" model still suggests that the final capitulation is far off, but we'll see.

--arepo

[oda.krell]

while i still don't see us retesting $400, there is little price action between these two price points to help determine what kinds of supports we can expect. i have to say this took me a little by surprise. do you think that the "china ban panic" on the forums contributed to the severity of this movement?

Good observation on the smaller bearish flag.

I'd say the 'china ban' panic helped trigger what we see now, but is not the cause. I still see a severe lack of consistent buying pressure at this price level. Sure, there are short bursts when we touch the lower levels of support, but in between volume and price action is nothing that inspires confidence in this level (>500) in my opinion. Daily CMF confirms that view, I'd say, it's not comparably at all to mid July 2013 when we turned around for good last time... actually, it starts looking like June 2013, right before the final leg down.

i figured that the recent bullish action was a "bulltrap", for what it was worth, because we did not have the necessary volume to overcome the askwalls on bitstamp, and FIGURE 1 from this week's issue still showed a little bit more of consolidation space before a breakout, but to move nearly straight down from the upper resistance straight through an important month-scale support, all within 18 or so hours!

the daily-scale CMF and MACD do both look pretty grim now. i expect more downward movement from here, possibly to as low as $400. i'm not too sure about your comparison to June 2013, though, as the "factor 3" model still suggests that the final capitulation is far off, but we'll see.

--arepo

No, sorry... I should have phrased that differently: I'm not saying we're in a similar situation to June 2013. Just that CMF resembles more June than July last year. Other than that, I don't see many similarities, even though I would now say that in my 2nd most *optimistic* scenario we have about one month of bear market left (i.e. the larger triangle).

[arepo]

The short-term bullish interpretations from page 13 of this week's issue correctly forecast the bullish movement up to the mid-term resistance, but alas, it was a bull-trap!

When we broke under the $530 support, based on FIGURE 1 from this week's newsletter, we broke out of the triangle consolidation pattern we had been tracking for most of this month, and referring to page 15, "CONTINGENCIES", this was a mid-term bearish signal, forecasting the further capitulation down to the $470 low.

so let's take a look at what's happened since:

---
2-hour scale


https://i.imgur.com/Uy8gfxt.png

---

on this scale, we see a sharp rebound and a symmetrical triangle consolidation pattern, threatening to break downside.

if we take a look at the 1-day scale of the past 5 months, we can see this pattern in the historical data, as well:


https://i.imgur.com/PuzFCKc.png

as we can see, the symmetrical triangle pattern forming at a significant height above the low (WHITE) is more bearish than the flat-topped triangle pattern in the same price environment (YELLOW).

so we have three possible scenarios:

scenario a: a bullish breakout of the current consolidation pattern, reaching the resistance at $530 -- least likely.

scenario b: a bearish breakout of the current consolidation pattern, reaching the support at $470 -- most likely.

scenario c: a bearish breakout of the current consolidation pattern, moving below the last low at $470 and reaching a new low, higher than the base support at $400 -- less likely.

scenario b corresponds to a fractal breakout into the larger flat-bottomed consolidation model on the 4-hour scale that i expect needs to be traced out before we see lower lows:

---
4-hour scale


https://i.imgur.com/VgfLTKU.png

---

the implications of FIGURE 1 being decisively falsified will be explored in depth in next week's newsletter! feel free to post more specific questions below and i will explore the short-term situation in greater detail.

--arepo

[arepo]

The downward breakout anticipated in the previous post merely broke us out into a larger symmetrical triangle, but it seems the true downward breakout is starting as i type.

again, we're most likely going to retest the support at $470. mid-term indicators are bearish, so this is an important test. if we break under this support, we could see some serious capitulation or a slow grind into a short-term downtrend.

[arepo]

drifting downwards on low volume is relatively neutral, but a downwards channel is forming that will bring us to the support at $466 if we do not reverse. again, this test is critical. a bounce (scenario b, most likely) will likely resolve into a flat-bottom consolidation pattern (detailed in the above updates). a break under this support is very bearish.

we just witnessed a bounce off of the 23.6% Fibonacci support ($473) as detailed on page 16 of this week's issue. a bounce here would likely resolve into an even larger symmetrical triangle consolidation pattern, which would actually be more bearish than a proper retest of the lower support, as this pattern in this environment is the dreaded "Bear Pennant" downtrend continuation signal. a flat-bottomed triangle that properly retests the last low has a better chance of breaking upward.

--arepo

[Kramerc]

What do you think about the huobi chart? The consolidation looks more like a symmetrical triangle rather than a flat-bottom one, in comparison to stamp.

Should we be expecting a violent downward movement today or tomorrow?

[arepo]

What do you think about the huobi chart? The consolidation looks more like a symmetrical triangle rather than a flat-bottom one, in comparison to stamp.

Should we be expecting a violent downward movement today or tomorrow?

are you referring to the fact that huobi has still not trended all the way down to the last low? this higher low could be the start of a symmetrical triangle, yes. however, stamp has already trended all the way down to the last low ($466)! either we break under this support and see some more capitulation quite soon or within the next 6 hours, or we bounce and see tandem triangles -- flat-bottomed (descending) on bitstamp and symmetrical on huobi, which will postpone the market decision for most of the day.

--arepo

edit:

scenario b, playing out on the 12-hour scale


https://i.imgur.com/VdXJzqt.png

as this 12-hour candle has 1 hour till close with pretty pathetic volume for a breakout candle so far, it's pretty much now or never for a decisive break under $466 for bitstamp. if we do not see a decision in this time frame, there is another time frame (the 6-hour i mentioned) that it is still possible, though less likely, after which, if we do not see the necessary volume, we will be trapped in the tandem triangles described above. the market is still leaning bearish but if the necessary selling volume does not materialize despite the many opportunities an upwards breakout becomes possible again after the largest triangle is traced. i will update this thread with weighted scenarios in that case, as we approach the narrow end of that pattern.

[arepo]

What do you think about the huobi chart? The consolidation looks more like a symmetrical triangle rather than a flat-bottom one, in comparison to stamp.

Should we be expecting a violent downward movement today or tomorrow?

triangles can be tricky because they have the nasty habit of breaking out into larger and more complex fractal patterns, instead of the clear textbook breakout, as the market postpones a decision. let me know if my previous post was clear enough to answer your question

--arepo

edit: BREAKOUT! right on schedule now we just need some real volume to confirm, and we could see a movement down to an estimated support of $410-$420 within 12 hours.

[Kramerc]

What do you think about the huobi chart? The consolidation looks more like a symmetrical triangle rather than a flat-bottom one, in comparison to stamp.

Should we be expecting a violent downward movement today or tomorrow?

triangles can be tricky because they have the nasty habit of breaking out into larger and more complex fractal patterns, instead of the clear textbook breakout, as the market postpones a decision. let me know if my previous post was clear enough to answer your question

--arepo

edit: BREAKOUT! right on schedule now we just need some real volume to confirm, and we could see a movement down to an estimated support of $410-$420 within 12 hours.

Yes. Your previous post made sense, and now we've broken out of the following larger triangle. Doom and gloom.

[arepo]

What do you think about the huobi chart? The consolidation looks more like a symmetrical triangle rather than a flat-bottom one, in comparison to stamp.

Should we be expecting a violent downward movement today or tomorrow?

triangles can be tricky because they have the nasty habit of breaking out into larger and more complex fractal patterns, instead of the clear textbook breakout, as the market postpones a decision. let me know if my previous post was clear enough to answer your question

--arepo

edit: BREAKOUT! right on schedule now we just need some real volume to confirm, and we could see a movement down to an estimated support of $410-$420 within 12 hours.

Yes. Your previous post made sense, and now we've broken out of the following larger triangle. Doom and gloom.

aw, it's not all that bad. you can tell i'm a trader at heart. i love bitcoin, but downtrends are just as profitable as uptrends. in fact, you can make profits denominated in BTC during price losses, so if you hate dirty fiat, that's all the better!

also, markets always swing from overbought to oversold. catch the bottom and you're looking at healthy gains in the next bull market, as well.

--arepo

[arepo]

BREAKOUT! right on schedule now we just need some real volume to confirm, and we could see a movement down to an estimated support of $410-$420 within 12 hours.

still following this pattern pretty solidly. we need to see some serious volume before this trend is terminated, and the estimated support in the above quote can be derived from the following extrapolation of the 5-month lows:


https://i.imgur.com/eUJLKeF.png

---

present price action aside, i'd like to remind the general forum that the next issue of my weekly newsletter will be sent out tomorrow morning! if you are panicked or confused because of the recent price action, you may want to consider subscribing. the publication will present a clear and accessible technically-based model for price behavior for the coming week, as well as mid-term projections for how long this bear market could last, and what might be the reason behind the paradigm shift away from the standard bullish bubble resolutions we've seen in the past.

i've updated the pricing tiers in the OP to reflect the publication's end date after the week of 23 June. however, i have not changed the BTC price from when i originally priced it at around 600 BTCUSD, so value-wise i'm offering a 30% discount!

to subscribe, please forward payment to the address in my signature and send me a PM, and i will confirm your subscription in the thread. thanks in advance for your support! remember to keep a cool head in this volatile price environment, and happy trading!

--arepo