Hope for the best, Expect the worst

[mikeywith]

So BTC is down 30% from the last high, how far can we go ?


On the weekly chart below, i use only the 5 SMA (blue) and 20 SMA ( Orange )

 



Using the BLX chart, you can see that from 2010 all the way to 2018, every time we had a weekly close below the 5 SMA we simply drop all the way to the 20 SMA.

in the above theory there is good news and bad news.


which one do you want to read first?

I personally like the bad news first

The bad news :

 The 20 SMA is hanging around 7200$ but by the time we get there, it should be at 7500-8000 , so there is a good chance we would see number 7 again.

The good news:

The 20 SMA on the weekly is very very strong, based on previous price behavior near the 20 SMA on the weekly, more than 90% of the time this SMA was strong enough to keep price above it during bull market and below it during bear market, so it's safe to assume that we are officially in a bull market and this merely a major correction.


My plan is to slowly buy btc from current price all the to sub 7k , and start selling at around 13600$ , even though I expect the next leg up to hit `16k , but that won't be this month, highly unlikely next month either as I do expect a few weeks of consolidation near the 20 SMA.


***The importance of the 20SMA on the weekly came to my attention from a video I watched on Youtube a long time ago, and I have been watching this SMA for a long time, i would like to give credit to whoever made the video whom I sadly can't remember.
 

[Krubster]

Hi mikeywith,

I've always enjoyed reading your TA, great stuff. I'm a bit confused though, in the beginning you said

On the weekly chart below, i use only the 20 SMA (blue) and 20 SMA ( Orange )

Don't you mean 5 SMA (blue)?

[Pursuer]

people loved comparing bitcoin of 2018 (the dropping year) with bitcoin of 2014 (the same dropping year) when it was dropping from its bubble and although I don't like these comparisons I have to admit we ended up having a lot of similarities.
right now it seems to me that despite no one really doing the same comparison anymore (between 2019 the recovery year with 2015 the past recovery year) but things are starting to look the same too.
so worst case scenario of repetition of the same thing at a bigger percentage drop from the high we reached would be reaching around $8500 before bouncing back up again.

[buwaytress]

See, this is why I don't mind TA, even if I don't believe in it. Short, sweet and looking at both possible sides of the coin (but hey the coin can land right on it's middle too, no?

Now if we reach the bad news, 7k BTC does not look bad to me at all. If it means that after 6 months from its 2019 we see 100% growth, that's really kind of good news. Not to mention additional time for me to accumulate.

If we reach the good news, then it's only confirming what we've been thinking since June.

Either way, let's expect 7k then!

@Pursuer yeah, all I can see on Twitter now is 80% drop comparisons from 2014,16,17 etc. That's kind of hoping for the best, though, so I'll let them hope.

[beerlover]

I think the clear winner would be going back up, not just because SMA but also the trends in bitcoin of when people sell and what needs to happen for people to sell whereas same goes for buy as well. We have seen bitcoin dropping to just under 10k only last week and then it reached back above 12k as well, it happened before as well, so all in all it is totally expected for bitcoin to do the same thing, I am not saying it has to, I am not saying it definitely will but looking at the previous things its quite possible for bitcoin to do the same thing again because there is no reason why it shouldn't.

Of course, it could still go down a bit more before going up because the more whales accumulate and the more they have in usdt and cash it means the more ammunition they will have to attack the tops and get back to high prices.

[BrewMaster]

the drop has lost its downward momentum, so apart from what it might be seen on the charts with TA i currently don't see any more drops coming with the way price pushed back up from $9k and has been resisting further drops.

so unless some new wave of FUD and panic begins in the market to create another selling momentum to break the $9000 level we may not see the "worst" but yeah lets expect $7k to not be disappointed

[Naida_BR]

Last week I was saying to everywhere not to get excited by that increase that occurred then.
If altcoins dont gain value respective to the increase in Bitcoin price then we are going to see drops like this one more often. I am sad that altcoins are struggling once again and they keep losing value in this drop.

[romero121]

The ongoing market crash is an expected one. This time the price could go even lower, but more possibility for recovering of altcoins with the next growth of bitcoin. As the thread title states rather than hoping for the best it is good to hope for the worse, and when the best happens by that time what we get out of the same will be extremely big.

[dunfida]

Im not a TA fanatic but basing just for some Moving average i cant say that we would headback on 7k price.We see some correction from 13k down to 9k which isnt that surprising and  in fact ive been accumulating as of this moment yet i have already sold out when its still on 13k price.Not bad for shorter terms.

Expecting the worst?Im already prepared for that one but buying on the bottom would always be an unending question as a trader.

[figmentofmyass]

interesting chart compared to the original timestamp. the chart shows price at $10.8k but the price was in the low $9000s at that time. it's like magic!

The 20 SMA is hanging around 7200$ but by the time we get there, it should be at 7500-8000 , so there is a good chance we would see number 7 again.

My plan is to slowly buy btc from current price all the to sub 7k

i'm glad so many analysts expect sub-$7500 and even down to $6k. not gonna happen IMO. bears are always too greedy. i think you are underestimating how fast the 20ma is rising, and also discounting the possibility that we take our sweet time reaching it.

[Kemarit]

the drop has lost its downward momentum, so apart from what it might be seen on the charts with TA i currently don't see any more drops coming with the way price pushed back up from $9k and has been resisting further drops.

so unless some new wave of FUD and panic begins in the market to create another selling momentum to break the $9000 level we may not see the "worst" but yeah lets expect $7k to not be disappointed

Yes, it seems that the bleeding some stop today, price goes on 5 digits again but we don't know who far this recovery will go or this is just another bull trap. Well who wouldn't want to see the price goes on $7000? Another golden opportunity to stash more BTC and then just ride the wave. But I'm not seeing another pull, but for experience traders, they already have plans for any momentum shifts.

But for noobs, this will also be another test for them and see how can they stand specially seeing the price goes down from $13000-$9000. So let's see and just hope that everything will be on our favor.

[mikeywith]

it's like magic!

It is magic, have you watched magicmike? That is what I do, i freeze the price so i can sell my btc for 10% more than the average joe  .


As far as the part of me underestimating how fast the 20 sma moves you are right, but then it does not really matter given the fact that when someone plans to trade based on an MA ,exact price  shouldn't be set, one should monitor it once a week at weekly close.

The range I estimated was merely a shot in the dark based on how fast I think we moving.

Anyhow, this TA should serve as a positive one , as long as we don't close below the 20 sma it is always safer to bet long, i am personally not holding my breath waiting for sub 7k coz we might not get there, but at that range some high risk leverage positions will sure be a great idea.

Also keep in mind that a pull-back to the 20 sma must come pretty soon, more on this to come  .....

[leowonderful]

Interesting analysis, great to see something detailed on this board again!

As for something I've personally noticed, I've been looking at the 50 EMA on the daily (near $10k) and it seems that is now acting as some sort of resistance as we've touched it from below and dropped back under it. We've been above the 50 EMA for this entire run up and nothing's really come close to breaking under it until recently, though I'm not entirely sure how to interpret this besides it acting as resistance for now. I'm still remaining bullish on the whole though, as it seems bearish momentum has slowed down over the last several hours and we had a sweet bounce from $9k this morning. Could still be some more downside to this, but I took a very low leveraged long a few minutes after the bounce and I'm keeping the stop in profit for now in case we do have some more bearish momentum soon.

[mikeywith]

Also keep in mind that a pull-back to the 20 sma must come pretty soon, more on this to come  .....

Took me some time to come up with the exact figures, but there we have it, as always - chart first






I had to zoom out this much, all the way to July 2010 ! you can't really see every single detail, but that does not matter, the purpose here is to focus on one simple thing which is:

How long can btc rally last without having to go back to the 20SMA on the weekly to "recharge" ?

you can see that it varies a lot, but overall during every bull market we had starting from 2010 , every time BTC said good buy to the 20SMA had to come back and touch it, there is a total of 10 times, the current one is the 11th

the longest one we had was back in late 2012 to early 2013 , a total of 154 days where BTC had enough momentum to last that long without having to go back and test the 20 SMA while average of those 10 moves is 120 days


The red part of the 20SMA was obviously drawn by me,I tried to maintain the same curvature beside taking into account that fact that we last couple weeks have been bearish which mean the angel of the trend has to get lower thus move slower to the upside at least the next couple weeks.


Now if we were to have an average move, then by end of this month, we should test the 20 SMA at around 7800$ , if we are going to repeat the longest run ever then we should rest on the 20 SMA sometime around 2nd Sep at at 8500$.


is it possible that we make a new record , say 200 days without having to take a break at the 20SMA station? it is indeed possible , but is it very likely that we are going to do so ? not very likely i'd say.

Remember that right now the 20 SMA is at 7200$ , took us almost 100 days of almost only green candles and a total of 277% increase in price to get to this mark, now assuming we would have the same thing again (nearly impossible) but let's just assume the 20 SMA will be hanging at 14500$ when btc does another 277% , BTC will be trading at about 50k while the 20SMA is at 14k , that is not possible, it's more likely than not that we should test the 20 SMA pretty soon if this trend is intending to be healthy.


also @ figmentofmyass mentioned that I seem to be " underestimating how fast the 20ma is rising" , in fact the faster the SMA moves the bigger the gap the bigger the correction, the 20 SMA has already moved to fast and this explains why we need 35-40% correction.

TL;DR : I view critical moving averages like the 20 SMA as a debt which BTC has to pay , the sooner the debt is paid the less painful it is.

[timerland]

The 20 SMA on the weekly is very very strong, based on previous price behavior near the 20 SMA on the weekly, more than 90% of the time this SMA was strong enough to keep price above it during bull market and below it during bear market, so it's safe to assume that we are officially in a bull market and this merely a major correction.


My plan is to slowly buy btc from current price all the to sub 7k , and start selling at around 13600$ , even though I expect the next leg up to hit `16k , but that won't be this month, highly unlikely next month either as I do expect a few weeks of consolidation near the 20 SMA.

So short term, are you saying that we will see levels sub-$7k?

I don't necessarily think that is a likely scenario, given that we are in an established bull market already and that we've seen support at $9k which caused the rebound today. But if it does ever get that low then it's certainly a zone for accumulation.

I really don't understand the panic that people have shown over the past week or so, though. Like we get it, prices did go down drastically from a high of around $14k all the way to sub-$10k, but what else do you realistically expect in a bull market where markets in the short run are extremely volatile? Also, it's not like this correction is unwarranted in any way, prices have simply been growing at unsustainable rates for the past 1-2 months.

[mikeywith]

So short term, are you saying that we will see levels sub-$7k?

That is not exactly what i am actually trying to say, but let me rephrase the OP in simple points


1- We will very likely test the 20 SMA on the weekly pretty soon ( doesn't matter where it is by then ) for more details about this exact point please read my previous post .


2-There is no reason to panic if we were to see sub 7k or 8k , it does not mean we were entering a bear market , if that happens, think of it as the PERFECT correction which will give us enough power to break 14k.


3-If price closes below the 20SMA it is a bad sign, the trend will officially be looked at as a down trend, and rally to 14k was merely a correction of a bigger and more brutal down trend  ( very low portability scenario, as the tittle says : expect the worst)

4-buying near the 20SMA when price is above it is a probably one of the best trades one can make in terms of risk:reward ratio.

[omonuyak]

So BTC is down 30% from the last high, how far can we go ?


On the weekly chart below, i use only the 5 SMA (blue) and 20 SMA ( Orange )

 



Using the BLX chart, you can see that from 2010 all the way to 2018, every time we had a weekly close below the 5 SMA we simply drop all the way to the 20 SMA.

in the above theory there is good news and bad news.


which one do you want to read first?

I personally like the bad news first

The bad news :

 The 20 SMA is hanging around 7200$ but by the time we get there, it should be at 7500-8000 , so there is a good chance we would see number 7 again.

The good news:

The 20 SMA on the weekly is very very strong, based on previous price behavior near the 20 SMA on the weekly, more than 90% of the time this SMA was strong enough to keep price above it during bull market and below it during bear market, so it's safe to assume that we are officially in a bull market and this merely a major correction.


My plan is to slowly buy btc from current price all the to sub 7k , and start selling at around 13600$ , even though I expect the next leg up to hit `16k , but that won't be this month, highly unlikely next month either as I do expect a few weeks of consolidation near the 20 SMA.


***The importance of the 20SMA on the weekly came to my attention from a video I watched on Youtube a long time ago, and I have been watching this SMA for a long time, I would like to give credit to whoever made the video whom I sadly can't remember.
 

I believe in the analysis you have made and it is very clear that bitcoin will still go below $9000 or maybe to the support level of around $7500 as is been speculated. Most of the cryptocurrency analyst is saying the same thing as I have read on Twitter and cryptocurrency sites' news. The hope we have in this is that bitcoin will take off from the 20ma on the weekly chart or 200ma on the daily chart.

[1Referee]

But for noobs, this will also be another test for them and see how can they stand specially seeing the price goes down from $13000-$9000. So let's see and just hope that everything will be on our favor.

Noobs will fail every test. It's impossible for them to withstand the brutal nature of this market when they 1) have invested their life savings, and 2) they have no clue about how Bitcoin works under the hood. Every $1-$2000 dip makes them question themselves so much that it drives them nuts to a degree where the sell button is just one click away.

Noobs trading stocks are similar. In the last couple of decades nothing changed when it comes to their behavior during corrections, so why would anything change in a market that's even more volatile and brutal? No amount of tips and tricks is enough to educate these poor fellas. They should stay far away from any type of market.

[webtricks]

See, this is why I don't mind TA, even if I don't believe in it. Short, sweet and looking at both possible sides of the coin (but hey the coin can land right on it's middle too, no?

Generally people perceive the idea of TA wrongly. They think TA is some mathematics formula using which will bring us to single solution. That's wrong! TA doesn't bring absolute results. It is based on previous trends and in most of the cases subjective. Trends are further based on the past actions of traders. Now traders don't act in the same way every time. So TA is nothing but a short summary of all previous actions of traders. Therefore, we can say analysis of same security can show us two or more possible happenings (like the one in OP). In other words, TA can only show us possible roads and it is entirely our wish which road we want to walk on.

[dothebeats]

2-There is no reason to panic if we were to see sub 7k or 8k , it does not mean we were entering a bear market , if that happens, think of it as the PERFECT correction which will give us enough power to break 14k.

Was always looking for another entry point for my buys and I was thinking that anything below $10k was already a good possibility. We're now back at the $10k levels after a harsh correction down to $9300 these past few days and I don't think we'll be seeing a lot more downward action anytime sooner, but then again the forward momentum is still bleak. Orders from the buying side is still weak though, and I don't think the weak hands are already shaken--not yet.