Yet another analyst

[naikturun]

do you mean that this week it will drop to 9600? hmm, I did see a very fast decline last night where all the alt also fell, some even fell above 15% in just a few minutes.
but a few minutes after the btc dropped to 11000 right, then it went back up and stayed in the range 11200-11,500.

No, I don't mean that.

I'm looking for an obvious breakout. Breaking and closing below $11,100 should do it. After that, I'd be looking for $9,600.

Yesterday's ~$1,000 dump brought us to the lower bounds of the range, but BTC is technically still just ranging. Don't want to jump the gun here.

but it looks like your prediction is right, now the price is at 10,200 where you mentioned the breakout at 11000.
likely a price to 9600 will occur.and now my assets are min above 40%
is there any possibility of a deeper drop after the 9600 point?

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[exstasie]

I'm looking for an obvious breakout. Breaking and closing below $11,100 should do it. After that, I'd be looking for $9,600.

but it looks like your prediction is right, now the price is at 10,200 where you mentioned the breakout at 11000.
likely a price to 9600 will occur.and now my assets are min above 40%
is there any possibility of a deeper drop after the 9600 point?

Yes, absolutely. My theory is the March-August rally is Wave 1 of a larger bullish impulse. Wave 2 pullbacks can be quite sharp and severe. A 61.8% retrace to the low $7,000s would be pretty typical. However, I would first expect a sizable bounce off the $9,000s given all the consolidation there during June-July.

That is not to say Wave 2 must go as far as the 61.8% fib. It could also be a complex, sideways correction that doesn't go below the 38.2% in the $9,000s. We'll have a better idea in a couple weeks as more price action comes in.

[exstasie]

Hey i see you use the Elliot wave theories alot

Forgive my ignorance if you will, but do you have any limit prices in mind when entering a trade or do you just market enter whenever you feel a wave has been completed which would signify the next move?

For me, EW is mostly about building an overall road map that keeps me trading on the right side of the trend, but it does offer some insight regarding entries and exits.

For example, if I believe a bullish Wave 1 is complete (as above) then I would expect Wave 2 to unfold either as a sharp 3-swing corrective like an ABC that reverses in the 0.5-0.618 area ($7,100-$8,200) or a complex sideways corrective like a WXY that reverses in the 0.382 area (~$9,200). Those would be the most common scenarios.

So with that in mind, I look for confluence with other classical TA methods near those expected Fib levels. Candlestick and volume analysis, divergence, horizontal S/R like pivots, gap analysis, Bollinger bands and key MAs......all play a role.

The 0.382 in the upper $9,100s lines up with significant horizontal S/R from June-July. Several weekly pivots in that area. There is a low volume notch in the mid-$9,000s as well as a big gap on the weekly CME chart at $9,600. All of this tells me to look for signs of reversal (bullish divergence, volume extremes, reversal candlesticks) and a possible entry in the low-mid $9,000s.

In the first scenario (the sharp correction), this bottom would represent the A swing low. So we can counter trend trade the bullish Wave B with the expectation of a future bearish Wave C. In the second scenario (the complex sideways), this bottom would represent the W swing low. The subsequent X wave is a bullish retracement, followed by a Y wave which is usually a higher low. Since these are the two most common scenarios, it makes a lot of sense to look for entry in the low-mid $9,000s, then wait and re-assess to determine which scenario is unfolding.

Risk vs. reward is also a key part of my rationale for whether to enter a trade. If I can't get 3:1 or better I usually don't take the trade. Often times, the correct EW count is only obvious in hindsight, after the ideal trade entry is long gone, so it's important to use other methods to identify those opportunities.

Often times, I'll have 2 or 3 different possible EW counts in mind, but generally all of them will incorporate the same key Fib and S/R levels. So we can trade all those levels the exact same way (basically, buy at support and sell at resistance) while the EW roadmap builds out from a bird's eye view, giving us a sense of where the market is headed next.

[naikturun]

I'm looking for an obvious breakout. Breaking and closing below $11,100 should do it. After that, I'd be looking for $9,600.

but it looks like your prediction is right, now the price is at 10,200 where you mentioned the breakout at 11000.
likely a price to 9600 will occur.and now my assets are min above 40%
is there any possibility of a deeper drop after the 9600 point?

Yes, absolutely. My theory is the March-August rally is Wave 1 of a larger bullish impulse. Wave 2 pullbacks can be quite sharp and severe. A 61.8% retrace to the low $7,000s would be pretty typical. However, I would first expect a sizable bounce off the $9,000s given all the consolidation there during June-July.

That is not to say Wave 2 must go as far as the 61.8% fib. It could also be a complex, sideways correction that doesn't go below the 38.2% in the $9,000s. We'll have a better idea in a couple weeks as more price action comes in.

ok yesterday btc went down to 9960 and went back up to the range of 10000 and since then I haven't seen a decrease again after that it was just between these numbers.
so if next week the market starts with an increase then the possibility of it going down to the range 9000 will disappear or will it still be?
since I started to see my portfolio increase I hope it will continue to go up, even though the reality will still be difficult.
please say something that makes me happy 

[JayJuanGee]

please say something that makes me happy  

In the coming week, BTC prices will go up, which should make you happy -

unless

such BTC prices were to happen to go down


or sideways

[exstasie]

so if next week the market starts with an increase then the possibility of it going down to the range 9000 will disappear or will it still be?

That possibility won't disappear so quickly.

Time is difficult to predict. The best method I've come across is Tim West's "Time at Mode" methodology. You identify a trading range and measure the number of bars spent at one price. Once a range expansion occurs, that number of bars roughly determines how long the subsequent trend will prolong for.

Here is a good example: https://www.tradingview.com/chart/SPY/0bRbUhpL-Time-At-Mode-Methodology-in-SPY-Daily-Weekly/

I updated the trading chat room "Key Hidden Levels" with this analysis as the rally unfolded out of the December-January trading range that is shown where there are 20-days at one price. There were also 7-weeks at one price, which implies that the market would advance for both 20-days and for 7-weeks once it "disconnected" from that price. Disconnected means to "range expand away from" the mode and to trade with an entire range above the mode. You can see both did that where I have yellow and red arrows marking Day-1 and Week-1.

The rally time has exhausted, and typically that means you have an amount of time equal to the rally to congest and test the mode. If the mode holds, then assume a larger uptrend.

In Bitcoin's case at the present time, the rally congested and tested the mode, but then failed.

Looking at the daily and weekly charts, we spent approximately 21 days and 5 weeks respectively at $11,700 which I would consider the best representation of the mode. The September 2nd drop clearly triggered a range expansion away from the mode. From that day, we have approximately 21 days before the downtrend on the daily chart "expires" and 5 weeks before the downtrend on the weekly chart "expires." In the meantime, we should retain a bearish bias and not give up on our downside targets yet. On the daily, we are targeting the lower $9,000s. On the weekly, we are targeting the lower $7,000s.

If those downtrends expire and price is congesting without ever reaching our downside targets, that's a bullish sign indicating sideways accumulation.

[naikturun]

In the coming week, BTC prices will go up, which should make you happy -

unless

such BTC prices were to happen to go down


or sideways

thank you for the attention, really appreciate it.

That possibility won't disappear so quickly.

Time is difficult to predict. The best method I've come across is Tim West's "Time at Mode" methodology. You identify a trading range and measure the number of bars spent at one price. Once a range expansion occurs, that number of bars roughly determines how long the subsequent trend will prolong for

I think so, the BTC price movement did not go down too far, but the main target is the btc altcoin only down in the range of 2-3% per day but the alt can reach more than 40%.
I am holding an alt that has had a huge price drop because of this dump and has been down more than 60% from its baseline since this dump happened.

[exstasie]

This looks like a running bearish triangle to me:



So I've still got a bearish bias short term, and I'm still looking for the weekly CME gap around $9,600 to be filled.

This bearish triangle will be invalidated by a break above that $10,441 (Coinbase) pivot. That would imply this bottom off the $9,800s was an accumulation (rather than distribution) zone.

[exstasie]

It would be prudent to keep track of the US stock market at this time. The 50-day MA and lower daily BB are clearly important support levels, and the market is hovering right above them:



As long as we hold above, it's hard to get too bearish, and with risk assets (BTC, gold, stocks) so tightly correlated, this would be bullish for BTC and would likely support the mid-term sideways scenario discussed earlier.

If the market breaks and holds below those key support levels (currently ~3,300) it will signify a mid-term downtrend, which would definitely have bearish implications for BTC.

[JayJuanGee]

It would be prudent to keep track of the US stock market at this time. The 50-day MA and lower daily BB are clearly important support levels, and the market is hovering right above them:



As long as we hold above, it's hard to get too bearish, and with risk assets (BTC, gold, stocks) so tightly correlated, this would be bullish for BTC and would likely support the mid-term sideways scenario discussed earlier.

If the market breaks and holds below those key support levels (currently ~3,300) it will signify a mid-term downtrend, which would definitely have bearish implications for BTC.

It will be an interesting scenario, if traditional markets such as gold and stocks were to go sideways or down for a year or more and to find out if any of that has any chance of breaking bitcoin from its cycles - which are not long term correlated to those traditional assets, even when peeps attempt to put emphasis on short term correlations, that may well be merely coincidental rather than longer term viable.

Personally I doubt that we are going to find ongoing longer term correlation, even if such correlation might be able to stretch out for 6-12 more months... probably best case scenarios... If we see ongoing correlation for that long (6-12 months) I would be quite surprised that such would even be possible, and if such correlation were to go on longer than that (longer than 12 months), we might have to start considering whether some or all of the BTC currently valid price prediction models might have some flaws therein... Seems quite improbable, even though we cannot really know until such passage of time were to take place with such unlikely ongoing correlation.

[exstasie]

It will be an interesting scenario, if traditional markets such as gold and stocks were to go sideways or down for a year or more and to find out if any of that has any chance of breaking bitcoin from its cycles - which are not long term correlated to those traditional assets, even when peeps attempt to put emphasis on short term correlations, that may well be merely coincidental rather than longer term viable.

They actually correlate very strongly over the long term. BTC and the S&P 500 have a positive correlation well over 0.8, going back to 2010 when BTC price discovery began.

If we see ongoing correlation for that long (6-12 months) I would be quite surprised that such would even be possible, and if such correlation were to go on longer than that (longer than 12 months), we might have to start considering whether some or all of the BTC currently valid price prediction models might have some flaws therein... Seems quite improbable, even though we cannot really know until such passage of time were to take place with such unlikely ongoing correlation.

Why would you be surprised? Correlation implies that price moves in the same direction. It doesn't address magnitude. If BTC is going to $1 million, it doesn't mean the S&P 500 is going to 300K.

I'm confident the current prediction models will fail at some point in the future too.

[JayJuanGee]

It will be an interesting scenario, if traditional markets such as gold and stocks were to go sideways or down for a year or more and to find out if any of that has any chance of breaking bitcoin from its cycles - which are not long term correlated to those traditional assets, even when peeps attempt to put emphasis on short term correlations, that may well be merely coincidental rather than longer term viable.

They actually correlate very strongly over the long term. BTC and the S&P 500 have a positive correlation well over 0.8, going back to 2010 when BTC price discovery began.

You can proclaim correlation until you are blue in the face.  I don't buy it.

If you are 80% correlated, but it happens that on those 20% of the time, BTC goes shooting up.. that is not correlation, even if you may have some short-term episodes of correlation, the BIG picture is not correlated.

Look at this chart comparing BTC to gold and to stocks.  It only goes out 9 years, but 9 years is long enough to make the point.

You have nearly 300x BTC price appreciation during that time, and you only have 44% and 54% in gold and equities respectively.

Of course, you could choose a shorter timeline and get less disparate price performance, but that still does not rise to the level of correlation, unless you are just making shit up.

Look at this 6 year comparison.

You have almost 12x price appreciation in BTC and merely a 50% price appreciation in gold and a 33% price appreciation in equities.

Yeah, maybe you have periods of 80% or whatever correlation contained within that overall period, but the punchline still does not seem to be anywhere close to actually making some kind of meaningful long term correlation claims.

Sure, go ahead and make short term correlation proclamations, and sure those are going to be true, until they are not.

I am not proclaiming that the future is guaranteed from the past patterns, but the currently existing strong BTC price prediction models are still showing a lot of convincing patterns and evidence that put pretty decent odds on continued upwards growth in BTC that are not correlated to gold or equities.


Just to point out that the three most dominant and convincing BTC price prediction models are the 1) PlanB stock to flow, 2) 4-year fractal and 3) s-curve exponential adoption based on metcalfe and networking principles...

If we see ongoing correlation for that long (6-12 months) I would be quite surprised that such would even be possible, and if such correlation were to go on longer than that (longer than 12 months), we might have to start considering whether some or all of the BTC currently valid price prediction models might have some flaws therein... Seems quite improbable, even though we cannot really know until such passage of time were to take place with such unlikely ongoing correlation.

Why would you be surprised? Correlation implies that price moves in the same direction. It doesn't address magnitude.

Huh?  That makes little to no sense - even if you might be technically correct, exstasie.  We surely better be considering magnitude if we want any kind of meaningful understanding about what is going on in bitcoinlandia compared to these other assets such as gold and stocks and how we want to allocate our various long-term investments and to play our long term strategies... including not screwing ourselves by attempting to play our short term strategies that end up losing sight of the BIG picture, including the magnitude of chances that could end up trapping someone into selling too much BTC too soon because they are valuing their wealth in dollars rather than bitcoin and they do not account for the magnitude of change that ends up locking them out of BTC and causing them to feel bitter about the whole thing.  We have already seen these dynamics several times in bitcoin's history where some previous BTC HODLers sell too much of their BTC stash (even all of it) too soon, and then the price never comes back down to their selling point and they become more and more bitter and unwilling to buy back at higher prices, which causes them additional opportunity costs in terms of further bitcoin price appreciation.  It happened in the past, and seems quite likely to happen again, especially if current BTC HODLers do not appreciate that  magnitude of change continues to be an important factor to consider when considering baloney correlation claims.

There have been articles and studies on the lack of correlation in BTC going back quite a way.. maybe even in 2015/2016.  Here is one from January 2017.

If BTC is going to $1 million, it doesn't mean the S&P 500 is going to 300K.

These surely are far from straight line correlations, even if they are going in the same direction.

You seem to be under-appreciating the power of king daddy and that it is on a bit of a different trajectory in terms of being an asset class that has not previously existed.   Paradigm shifting asset class, which is part of the explanation for its lack of correlation to other asset classes.

I'm confident the current prediction models will fail at some point in the future too.

Sure, at some point we are all dead, too.  What does that matter?

For now, the BTC price prediction models are doing quite well in terms of showing where bitcoin came from, where it is and also placing reasonable probabilities on where it might be going.

With any price prediction model or combination of models, we should be striving to account for current evidence and any additional evidence that plays out, so the price prediction models may well need to be tweaked in the future or they might show that they are actually broken and they do not explain the story very well in terms of where we came from, where we are at or where we might be going.  Until then, they remain the best game in town in terms of trying to figure out what to do and how to plan based on where we are at and how we got here.

[exstasie]

They actually correlate very strongly over the long term. BTC and the S&P 500 have a positive correlation well over 0.8, going back to 2010 when BTC price discovery began.

You can proclaim correlation until you are blue in the face.  I don't buy it.

I don't care to argue about facts. I just observe. You can verify asset correlations for yourself here: https://unicornbay.com/tools/asset-correlations

Although it's easy to spot on a price chart too.

If you are 80% correlated, but it happens that on those 20% of the time, BTC goes shooting up.. that is not correlation, even if you may have some short-term episodes of correlation, the BIG picture is not correlated.

Both stocks and BTC have been in a raging bull market since Bitcoin's inception. That's the big picture. That could certainly change, but I don't feel the need to speculate about that. I'd rather just observe.

You have nearly 300x BTC price appreciation during that time, and you only have 44% and 54% in gold and equities respectively.

BTC started at $0.01 shortly before that and gold was on the tail end of a bubble. Not the fairest comparison.

But again, magnitude is another issue entirely. Correlation implies when x goes up, y goes up. It doesn't imply equal percentage magnitudes or anything like that.

Just to point out that the three most dominant and convincing BTC price prediction models are the 1) PlanB stock to flow, 2) 4-year fractal and 3) s-curve exponential adoption based on metcalfe and networking principles...

All of which are experimental and not well-founded in any statistical sense. I'm very confident stock-to-flow will be invalidated over time. Same with the 4-year fractal. We don't even have evidence for an S-curve yet, although it's my favorite theory of the three.

We surely better be considering magnitude if we want any kind of meaningful understanding about what is going on in bitcoinlandia compared to these other assets such as gold and stocks and how we want to allocate our various long-term investments and to play our long term strategies...

In my opinion, magnitude isn't important to this analysis. The point of looking at asset correlation at all is to help confirm the direction of the trend. As far as magnitude goes, we can be reasonably sure that BTC will always move harder in both directions compared to stocks.

[JayJuanGee]

They actually correlate very strongly over the long term. BTC and the S&P 500 have a positive correlation well over 0.8, going back to 2010 when BTC price discovery began.

You can proclaim correlation until you are blue in the face.  I don't buy it.

I don't care to argue about facts. I just observe. You can verify asset correlations for yourself here: https://unicornbay.com/tools/asset-correlations

Although it's easy to spot on a price chart too.

I cannot see that we are arguing about facts.

We seem to be arguing about which facts to consider and how much weight to give to certain kinds of facts.

By the way, that correlation calculator that you linked makes little sense to me, and I had also already shown you charts over 6 years and 9 years to make comparisons between bitcoin, gold and equities, and if you are still striving to witness correlations or to read those kinds of price changes as as if BTC, gold and equities are correlated, then our definitions of correlation seems to be quite different.  

Hard to communicate if we cannot agree on what seems to be basic terms and even visuals about price change differences between assets over such period of time 6 years versus 9 years.  You are not coming up with different facts than me in terms of how much there are differences in the changes of the BTC prices as compared with those other assets classes, are you?

Probably our difference is in regards to the accounting for magnitude.  You already said that magnitude does not matter in your assessment of what is correlation, and that is likely part of the explanation (but surely NOT all of it) for why we are coming to differing weighing of conclusions based on looking at similar charts and how we read the facts in terms of what is the meaning of correlation and how much weight to give to patterns that we might see within the charts.

If you are 80% correlated, but it happens that on those 20% of the time, BTC goes shooting up.. that is not correlation, even if you may have some short-term episodes of correlation, the BIG picture is not correlated.

Both stocks and BTC have been in a raging bull market since Bitcoin's inception. That's the big picture.

I seem to appreciate that BTC has had several up and down cycles in there that seem to fall in line with the halvening (even though there could have argued to have been two upward cycles in BTC in 2013).   There have been a few extended price crashes in BTC too, and at the same time, BTC is a new emerging asset class that likely puts it into a kind of s-curve adoption curve, while stocks and gold are more mature assets (though you do not seem to be making any claims about gold, currently).

That could certainly change, but I don't feel the need to speculate about that. I'd rather just observe.

Well, if you are merely playing short term plays and failing/refusing to make long term bets, then hopefully you will still be able to profit from that.  Hopefully, you do not sell too much of your BTC too soon, merely because you may well be treating it in a similar way to a mature asset class when it likely is not fitting very well (except by force) into that framework.

You have nearly 300x BTC price appreciation during that time, and you only have 44% and 54% in gold and equities respectively.

BTC started at $0.01 shortly before that and gold was on the tail end of a bubble. Not the fairest comparison.

But again, magnitude is another issue entirely. Correlation implies when x goes up, y goes up. It doesn't imply equal percentage magnitudes or anything like that.

Just to point out that the three most dominant and convincing BTC price prediction models are the 1) PlanB stock to flow, 2) 4-year fractal and 3) s-curve exponential adoption based on metcalfe and networking principles...

All of which are experimental and not well-founded in any statistical sense.

I agree that the models are descriptive in terms of how they get to where we are at and they are probabilistic in terms of attempting to describe where BTC prices might be going, and probably we can agree to disagree in terms of how much weight to give them.

I'm very confident stock-to-flow will be invalidated over time. Same with the 4-year fractal. We don't even have evidence for an S-curve yet, although it's my favorite theory of the three.

I think that largely I already preemptively addressed your assertion that some day these models will no longer be valid.  They seem to be currently valid, so sure if you don't want to give hardly if any weight to them, then that is your choice.  I speak of them in combination anyhow because I take each of them with a grain of salt, because in terms of predictive value NO model is going show exactly where BTC prices might go when it comes to specifics, even if they might kind of get directionally correct, somewhat.

We surely better be considering magnitude if we want any kind of meaningful understanding about what is going on in bitcoinlandia compared to these other assets such as gold and stocks and how we want to allocate our various long-term investments and to play our long term strategies...

In my opinion, magnitude isn't important to this analysis. The point of looking at asset correlation at all is to help confirm the direction of the trend. As far as magnitude goes, we can be reasonably sure that BTC will always move harder in both directions compared to stocks.

I largely agree with you that bitcoin is going to move harder than stocks or even gold, and that greater amount of movement is part of the characteristics of an immature asset class (it takes less capital to move it), but still it seems to me that your downplaying magnitude in your assessment of correlation is likely going to cause a failure to identify and to appreciate the power of the BTC price models that I have already pointed out.  Sure, there might be some other stuff going on too that the models do not quite capture - including some short term dynamics that can end up rippling into affecting longer term dynamics, and I have never claimed to be any kind of expert in getting into too many technical details, anyhow.  I have also been quite opposed to attempting to put too much emphasis in technical analysis, anyhow in terms of mathematical models will frequently fail in certain regards in terms of capturing human behavior - including the fact that sometimes a mere few number of people can sometimes end up changing trajectories that might not have been foreseeable in the models...

At the same time, on an ongoing basis, I do follow the proclamations and the analysis of a number of other folks who analyze BTC price dynamics in terms of a variety of factors, including sometimes what could be categorized into one or more of the three outlined price prediction models... and those models do assist in attempting to understand the information that i am getting and analyzing the strength or weakness of such information.

[buwaytress]

They actually correlate very strongly over the long term. BTC and the S&P 500 have a positive correlation well over 0.8, going back to 2010 when BTC price discovery began.

If we see ongoing correlation for that long (6-12 months) I would be quite surprised that such would even be possible, and if such correlation were to go on longer than that (longer than 12 months), we might have to start considering whether some or all of the BTC currently valid price prediction models might have some flaws therein.

All boils down to investment mood, doesn't it? I agree, on the major movements, capital and equity basically just flow in or take flight, always. In between, things in Bitcoin happen independently (and great point on magnitude) but if there is strong movement in stocks, it's going to trigger trader emotion across the board. Also proof for me institutional investment in Bitcoin happened long before people said they were waiting for ETFs and such.

It's the same correlation in crypto itself. Bitcoin goes up, so does the rest of crypto, but at different magnitudes.

[JayJuanGee]

They actually correlate very strongly over the long term. BTC and the S&P 500 have a positive correlation well over 0.8, going back to 2010 when BTC price discovery began.

If we see ongoing correlation for that long (6-12 months) I would be quite surprised that such would even be possible, and if such correlation were to go on longer than that (longer than 12 months), we might have to start considering whether some or all of the BTC currently valid price prediction models might have some flaws therein.

All boils down to investment mood, doesn't it? I agree, on the major movements, capital and equity basically just flow in or take flight, always. In between, things in Bitcoin happen independently (and great point on magnitude) but if there is strong movement in stocks, it's going to trigger trader emotion across the board. Also proof for me institutional investment in Bitcoin happened long before people said they were waiting for ETFs and such.

Personally, I believe that we are still in very damned early stages of institutional investments into bitcoin.

Sure we already have had some institutional investors entering into the BTC space, and like you suggest, some of these investments into BTC are likely "on the sly," but still I doubt that BTC is really experiencing anything close to large scale institutional investing into it, and that would include some government entities taking some kind of position into bitcoin too. 

Maybe governments (to the extent to which they decide to take some kind of stake in BTC, mining or HODLing) would also have to engage in their BTC investing on the side - and who the hell knows exactly how governments are going to ensure that their keys are securely held - some dictators might put a lot of power in individuals to hold keys, but there are likely going to be custodian institutions that are created around securitizing keys for BIG players   such as governments that are supposed to be publicly accountable or even institutions that sometimes are supposed to be publicly accountable too (to their share holders when they are a certain kind of company) that feel that they cannot put BTC keys too much in the hands of single players.

Anyhow, my point still remains that the involvement of institutions in bitcoin has to be pretty damned small potatoes at this point (and historically), even if you, buwaytress, suspect that some of them might have been getting into bitcoin on the sly, it is still likely small potatoes, otherwise we would almost have to have been seeing some of the effects of BIGGER players on the BTC price if they had actually already been entering into the BTC space in any kind of meaningful way on the side (which I really don't believe has happened, so far - even if they had been trying to be secret about their entrance into BTC, I just believe that we do not see any evidence, even indirectly of such material and meaningful entrances of BIGGER institutional players into the BTC space, so far).

It's the same correlation in crypto itself. Bitcoin goes up, so does the rest of crypto, but at different magnitudes.

I understand what you are saying, buwaytress, regarding shitcoins having lower liquidity and therefore able to pump more or to dump more, but personally, I doubt that it is very accurate to try to suggest that they are always going to do this.  So sure, we are likely going to witness some short term correlation periods, but almost every single one of them are pure shit, so it is likely NOT very healthy to attempt to compare them to bitcoin, as if they were some kind of lesser bitcoin.  In other words, we might witness various kinds of short term correlation between bitcoin and various shitcoins, until we don't.  For example, how long can ethereum keep up its charade of purportedly moving to ETH 2.0, which is also a likely sham system.  Sure they will continue to present the nonsense and various aspects of the public will keep buying into their paper claim smoke and mirrors nonsense as long as it is still pumpening.. but there is no there there.. even though it is possible that they could pump that nonsense for another 20 years, and if they do that and even if they continue to largely correlate that baloney with bitcoin, I doubt that would really be meaningful correlation, even though the smoke and mirror show were to be able to be continued for a decently long ass time.

[exstasie]

You can proclaim correlation until you are blue in the face.  I don't buy it.

I don't care to argue about facts. I just observe. You can verify asset correlations for yourself here: https://unicornbay.com/tools/asset-correlations

Although it's easy to spot on a price chart too.

I cannot see that we are arguing about facts.

We seem to be arguing about which facts to consider and how much weight to give to certain kinds of facts.

You denied a long term correlation exists. This is a matter of fact.

By the way, that correlation calculator that you linked makes little sense to me

What doesn't make sense about it?

Hard to communicate if we cannot agree on what seems to be basic terms and even visuals about price change differences between assets over such period of time 6 years versus 9 years.  You are not coming up with different facts than me in terms of how much there are differences in the changes of the BTC prices as compared with those other assets classes, are you?

Visually, and using any asset correlation calculator I have ever found, BTC and the stock market are obviously very closely correlated. Both long term and short term. If you can show me any actual evidence otherwise, feel free, but you're not providing any evidence whatsoever. You will not convince me in this manner. We can agree to disagree.

Probably our difference is in regards to the accounting for magnitude.  You already said that magnitude does not matter in your assessment of what is correlation, and that is likely part of the explanation (but surely NOT all of it) for why we are coming to differing weighing of conclusions based on looking at similar charts and how we read the facts in terms of what is the meaning of correlation and how much weight to give to patterns that we might see within the charts.

Asset correlation is an established idea with rigid definitions. It is based on dependency between two assets. It has nothing to do with magnitude. These matters are orthogonal. You keep introducing an irrelevant idea about magnitude to say I am wrong about correlation, or to say this is just a difference of opinion. It is actually a matter of fact.

Both stocks and BTC have been in a raging bull market since Bitcoin's inception. That's the big picture.

I seem to appreciate that BTC has had several up and down cycles in there that seem to fall in line with the halvening (even though there could have argued to have been two upward cycles in BTC in 2013).   There have been a few extended price crashes in BTC too, and at the same time, BTC is a new emerging asset class that likely puts it into a kind of s-curve adoption curve, while stocks and gold are more mature assets (though you do not seem to be making any claims about gold, currently).

Why does any of that matter? It certainly doesn't prove any of the price prediction theories discussed earlier (10 years of price data could never begin to do that) nor does it suggest a correlation does not exist between stocks and BTC.

That could certainly change, but I don't feel the need to speculate about that. I'd rather just observe.

Well, if you are merely playing short term plays and failing/refusing to make long term bets, then hopefully you will still be able to profit from that.  Hopefully, you do not sell too much of your BTC too soon, merely because you may well be treating it in a similar way to a mature asset class when it likely is not fitting very well (except by force) into that framework.

How does acknowledging the correlation exists and saying I will continue to observe it = selling BTC too soon?

I've said over and over that correlations inform price direction, not magnitude. Just because I think the stock market and BTC are both going up doesn't mean I plan to sell BTC as low as possible!

I agree that the models are descriptive in terms of how they get to where we are at and they are probabilistic in terms of attempting to describe where BTC prices might be going, and probably we can agree to disagree in terms of how much weight to give them.

The models tell me what might happen in the future. I can gauge their value as more price action comes in over time, confirming or invalidating them. Like Elliott Wave counts, they are in the back of my mind as possibilities, not so much as probabilities or things I can plan on.

The actual price history, including asset correlations, is a lot more valuable to me because it informs me about price direction on multiple important time frames in the here and now, rather than just giving me a vague "BTC is going to the moon because time or stock-to-flow or crystal balls."

I'm very confident stock-to-flow will be invalidated over time. Same with the 4-year fractal. We don't even have evidence for an S-curve yet, although it's my favorite theory of the three.

I think that largely I already preemptively addressed your assertion that some day these models will no longer be valid.  They seem to be currently valid, so sure if you don't want to give hardly if any weight to them, then that is your choice.

On a short enough time line, any cherry picked, curve fitting analysis can seem valid. What matters is the long run. That's why I say this very, very small amount of statistical data we have is insufficient to put much weight into these predictive theories.

Stock-to-flow and the 4-year cycle are both extremely rigid, and would be invalidated next year if BTC doesn't have another parabolic bubble in time. Possible sure, but it seems rather silly to focus on them.

In my opinion, magnitude isn't important to this analysis. The point of looking at asset correlation at all is to help confirm the direction of the trend. As far as magnitude goes, we can be reasonably sure that BTC will always move harder in both directions compared to stocks.

I largely agree with you that bitcoin is going to move harder than stocks or even gold, and that greater amount of movement is part of the characteristics of an immature asset class (it takes less capital to move it), but still it seems to me that your downplaying magnitude in your assessment of correlation is likely going to cause a failure to identify and to appreciate the power of the BTC price models that I have already pointed out.

Why?

Just because I talked about asset correlation doesn't mean I'm oblivious to matters of magnitude. I'm one of the few people around here who actually expect BTC to trade in the millions USD. Most people can barely wrap their head around six figures.

It just has nothing to do with the analysis of asset correlation, which is important because it helps determine or confirm price direction, vital matters for any technical trader.

[JayJuanGee]

You can proclaim correlation until you are blue in the face.  I don't buy it.

I don't care to argue about facts. I just observe. You can verify asset correlations for yourself here: https://unicornbay.com/tools/asset-correlations

Although it's easy to spot on a price chart too.

I cannot see that we are arguing about facts.

We seem to be arguing about which facts to consider and how much weight to give to certain kinds of facts.

You denied a long term correlation exists. This is a matter of fact.

Those are not facts that I am denying.  Those are conclusions from facts, including that you believe that magnitude needs to be accounted for in order to figure out what is correlated or not.  We disagree about the definition of correlation and whether magnitude needs to be accounted.  We do not disagree about how much the price of certain assets may have moved... at least, not so far.

Facts would be calculating how far BTC moved in comparison to stocks or gold or some things like that. not definitional matters or even how much weight to give to certain factors, which are kinds of disagreements about logic - not facts.. at least, so far, as far as I can see.

By the way, that correlation calculator that you linked makes little sense to me

What doesn't make sense about it?

How it reaches the numbers.  But of course, if it is refusing to account for magnitude and only looking at direction, then I could give less than two shits about the numbers that it pumps out.  I gave you charts of 6 years and 9 years that were from the DCABTC website and those clearly show magnitudes of performance that differ greatly between bitcoin, gold and stocks.  That is way the hell more convincing than looking at some baloney website that eliminates one of the important factors (such as magnitude) and then comes to directional conclusions that hardly mean shit in the whole scheme of things. You going to long term invest based on such nonsense?  Hopefully not.

Hard to communicate if we cannot agree on what seems to be basic terms and even visuals about price change differences between assets over such period of time 6 years versus 9 years.  You are not coming up with different facts than me in terms of how much there are differences in the changes of the BTC prices as compared with those other assets classes, are you?

Visually, and using any asset correlation calculator I have ever found, BTC and the stock market are obviously very closely correlated. Both long term and short term. If you can show me any actual evidence otherwise, feel free, but you're not providing any evidence whatsoever. You will not convince me in this manner. We can agree to disagree.

Exactly.  I believe that I provided you enough evidence and argument to prove my points, and you have provided your side.  We do not need to keep going on about this since we each have provided our case and made our points.

Probably our difference is in regards to the accounting for magnitude.  You already said that magnitude does not matter in your assessment of what is correlation, and that is likely part of the explanation (but surely NOT all of it) for why we are coming to differing weighing of conclusions based on looking at similar charts and how we read the facts in terms of what is the meaning of correlation and how much weight to give to patterns that we might see within the charts.

Asset correlation is an established idea with rigid definitions. It is based on dependency between two assets. It has nothing to do with magnitude. These matters are orthogonal. You keep introducing an irrelevant idea about magnitude to say I am wrong about correlation, or to say this is just a difference of opinion. It is actually a matter of fact.

We do not agree.  So let's move on...if possible.

Both stocks and BTC have been in a raging bull market since Bitcoin's inception. That's the big picture.

I seem to appreciate that BTC has had several up and down cycles in there that seem to fall in line with the halvening (even though there could have argued to have been two upward cycles in BTC in 2013).   There have been a few extended price crashes in BTC too, and at the same time, BTC is a new emerging asset class that likely puts it into a kind of s-curve adoption curve, while stocks and gold are more mature assets (though you do not seem to be making any claims about gold, currently).

Why does any of that matter? It certainly doesn't prove any of the price prediction theories discussed earlier (10 years of price data could never begin to do that) nor does it suggest a correlation does not exist between stocks and BTC.

Again, I think that I have provided enough information and evidence.  I don't feel any need to study the matter further or even to discuss further.  You are not raising any new points or even undermining points that I already made, from my perspective.

That could certainly change, but I don't feel the need to speculate about that. I'd rather just observe.

Well, if you are merely playing short term plays and failing/refusing to make long term bets, then hopefully you will still be able to profit from that.  Hopefully, you do not sell too much of your BTC too soon, merely because you may well be treating it in a similar way to a mature asset class when it likely is not fitting very well (except by force) into that framework.

How does acknowledging the correlation exists and saying I will continue to observe it = selling BTC too soon?

Well, if you believe that BTC's price is going to correct then you sell all or a large portion of your BTC and you bet on the direction of your beliefs, don't you?  So instead of being able to profit from BTC going from $10k to $1million, you sell most or all of your BTC at $87k because you believe that BTC is not going to be able to go above $100k because it is correlated to the movements of stocks, gold or whatever other correlations you believe exist.

I've said over and over that correlations inform price direction, not magnitude. Just because I think the stock market and BTC are both going up doesn't mean I plan to sell BTC as low as possible!

Great. If you do not plan to sell all or most of your BTC because you believe that BTC is going to correct, then maybe you will not end up under investing in BTC and maybe you will not end up missing out on the likely upwards BTC price moves that we are going to end up having soon^tm.

I agree that the models are descriptive in terms of how they get to where we are at and they are probabilistic in terms of attempting to describe where BTC prices might be going, and probably we can agree to disagree in terms of how much weight to give them.

The models tell me what might happen in the future. I can gauge their value as more price action comes in over time, confirming or invalidating them. Like Elliott Wave counts, they are in the back of my mind as possibilities, not so much as probabilities or things I can plan on.

I don't see any difference between calling something a "possibility" or calling it a "probability."  Those are largely the same ideas that are just a matter of differing semantical weight.

The actual price history, including asset correlations, is a lot more valuable to me because it informs me about price direction on multiple important time frames in the here and now, rather than just giving me a vague "BTC is going to the moon because time or stock-to-flow or crystal balls."

I am not proclaiming that asset correlation is not important; it is a matter of how much weight to give to such information and whether it causes you to come to differing conclusions regarding where you might be and where you might be going and how much to invest or allocate in accordance with those assignments of probabilities.  We are not going to come to the same conclusions and sometimes we might not even give the same weight to certain factors as can already be seen by our recent back and forth on this subject matter.

Surely some times we are going to find that people make bets based on feelings or intangibles, but none of us has really mentioned anything like crystal balls in terms of relevancy.. even though some people will sometimes consult with those kinds of tools if they are uncertain about one direction or another.. at least so far we have not devolved into crystal balls - even though it seems to me that your expressed desires to denigrate the importance of magnitude is going to lead to weird ass conclusions.. at least from my understanding of what you seem to be saying in that direction.

I'm very confident stock-to-flow will be invalidated over time. Same with the 4-year fractal. We don't even have evidence for an S-curve yet, although it's my favorite theory of the three.

I think that largely I already preemptively addressed your assertion that some day these models will no longer be valid.  They seem to be currently valid, so sure if you don't want to give hardly if any weight to them, then that is your choice.

On a short enough time line, any cherry picked, curve fitting analysis can seem valid. What matters is the long run. That's why I say this very, very small amount of statistical data we have is insufficient to put much weight into these predictive theories.

Stock-to-flow and the 4-year cycle are both extremely rigid, and would be invalidated next year if BTC doesn't have another parabolic bubble in time. Possible sure, but it seems rather silly to focus on them.

I doubt that they are as rigid that you are making them out to be or that you are trying to suggest that I am granting them that level of rigidity. 

Let's say that there is no BTC price run in the upcoming 2 years, and instead it seems to get drug out another 4 years or longer.  I am NOT sure at what point that the 4 year fractal would become invalidated, but surely as I type, the four year fractal is not invalidated, so it does not seem silly to give it some weight, and my already mentioning the three models together should already have established that I am not focusing on any one of those models, and I am also open to some other information that might be more convincing or to shed light on the models in a different way.. so far we do not have anything that is more convincing than the three models that I already mentioned... You can poo poo them all that you want.  I am not overly relying upon those models to come true, either, so perhaps we can agree to disagree regarding how much weight to give them or if there might be some better information out there, then probably you would need to say that because I don't really see anything so far, even though you are saying that they might not be true, which is a BIG so what... They are true until they are not, and it is not silly to have some kind of guidance rather than proclaiming or believing that anything can happen because "reasons" and not saying what those vague "reasons" might be.. beyond proclaiming correlation (which again I consider to be baloney and inferior to the models that I outlined in terms of actual "reasons").

In my opinion, magnitude isn't important to this analysis. The point of looking at asset correlation at all is to help confirm the direction of the trend. As far as magnitude goes, we can be reasonably sure that BTC will always move harder in both directions compared to stocks.

I largely agree with you that bitcoin is going to move harder than stocks or even gold, and that greater amount of movement is part of the characteristics of an immature asset class (it takes less capital to move it), but still it seems to me that your downplaying magnitude in your assessment of correlation is likely going to cause a failure to identify and to appreciate the power of the BTC price models that I have already pointed out.

Why?

Just because I talked about asset correlation doesn't mean I'm oblivious to matters of magnitude. I'm one of the few people around here who actually expect BTC to trade in the millions USD. Most people can barely wrap their head around six figures.

It just has nothing to do with the analysis of asset correlation, which is important because it helps determine or confirm price direction, vital matters for any technical trader.

Frequently, i have found your analysis to be helpful and insightful, so we could largely be arguing about semantics and the use of the term correlation and the weight of the various BTC price models.. I don't know, and I doubt that it really needs a whole lot more explanation because it seems that we have batted this topic back and forth enough, no? 

We aren't really getting anywhere in some of the last couple of posts, are we?  Maybe we clarified a few points, perhaps?  but seems that we are largely starting to just get repetitive, no?

[buwaytress]

Personally, I believe that we are still in very damned early stages of institutional investments into bitcoin.

Sure we already have had some institutional investors entering into the BTC space, and like you suggest, some of these investments into BTC are likely "on the sly," but still I doubt that BTC is really experiencing anything close to large scale institutional investing into it, and that would include some government entities taking some kind of position into bitcoin too. 
[/quote]

The problem is it's going to be very hard to prove or track this "institutional Bitcoin" -- they're mostly held in custodial wallets, mainly done OTC, and mainly happen off-chain. I simply don't see them keeping stuff on their own wallets or addresses, nor even making actual transactions on chain when they're trading or moving, they're simply doing everything third party. In fact, with second-layer now, even more difficult to see, my suspicion is LN channels some day just moving between institutionals and perhaps closing it all off to show one big transaction hiding thousands between institutionals. So we'll never really know.

It's the same correlation in crypto itself. Bitcoin goes up, so does the rest of crypto, but at different magnitudes.

...the smoke and mirror show were to be able to be continued for a decently long ass time.
[/quote]

Certainly far longer than I'll be alive, probably. And for a lot of investors, that's more than enough time to ride on that correlation. I agree, none of that is sustainable but for shitcoins like ETH, to even be at $100 when they were $3 4 years ago or so... they'll not care they couldn't hold on to $1400.

[JayJuanGee]

Personally, I believe that we are still in very damned early stages of institutional investments into bitcoin.

Sure we already have had some institutional investors entering into the BTC space, and like you suggest, some of these investments into BTC are likely "on the sly," but still I doubt that BTC is really experiencing anything close to large scale institutional investing into it, and that would include some government entities taking some kind of position into bitcoin too. 

The problem is it's going to be very hard to prove or track this "institutional Bitcoin" -- they're mostly held in custodial wallets, mainly done OTC, and mainly happen off-chain. I simply don't see them keeping stuff on their own wallets or addresses, nor even making actual transactions on chain when they're trading or moving, they're simply doing everything third party. In fact, with second-layer now, even more difficult to see, my suspicion is LN channels some day just moving between institutionals and perhaps closing it all off to show one big transaction hiding thousands between institutionals. So we'll never really know.

To me the situation of transparency or not is not a futile set of happenings.

Like I mentioned, some of them (such as governments and public companies) have reporting requirements - otherwise they are going to get themselves in a pickle if they do not report what they are doing.  Sure, even if they have reporting requirements sometimes they still might be a bit coy about what they are doing or they may skirt such reporting requirements to the extent that they believe that they are able to get away with NOT reporting - or perceived loopholes.

Other entities may not feel that it is necessary to report, but still they might choose to disclose some of their holdings and practices in general ways or to make public some of their involvement in bitcoin.

The various aspects of incomplete information is not a problem in my mind, because the world tends to work like that.  We do not always have complete information - unless certain events happen that trigger publication of information, and of course, there are a lot of ways to utilize a combination of the information that we have.. the direct information and the inferences in order to attempt to make reasonable conjecturing about what is going on in the world, rather than throwing up our hands and proclaiming that we are never going to know exactly, so why try figuring it out? 

Part of my point in my earlier post is to postulate a belief that relatively speaking NOT a whole hell of a lot of institutional players are in bitcoin, and I am making those kinds of assertions based on incomplete information and speculation. I believe that my speculations are reasonable, and I will hold them or tweak them until there is further direct or inferential information that causes me some need to tweak my assertions in another direction.

It's the same correlation in crypto itself. Bitcoin goes up, so does the rest of crypto, but at different magnitudes.

...the smoke and mirror show were to be able to be continued for a decently long ass time.

Certainly far longer than I'll be alive, probably. And for a lot of investors, that's more than enough time to ride on that correlation. I agree, none of that is sustainable but for shitcoins like ETH, to even be at $100 when they were $3 4 years ago or so... they'll not care they couldn't hold on to $1400.

Personally, I am still not going to get involved in that kind of shitcoinery crap even if I believe that there are reasonable chances that some of them are going to pump here and there for a long time.  I personally believe that bitcoin is an investment that serves a lot of my own personal needs to hedge against dollar based investments, and a lot of the performance of shitcoins is correlated to bitcoin, yet the shitcoins add various kinds of additional risk. 

So that already existing correlation causes no necessity to diversify into shitcoins, in my personal thinking, to make any stake in shitcoins..... and the additional risk is that the shitcoins can just go to zero at any time because they have a whole lot of areas of additional vulnerabilities, and I will leave those matters to the snot-nosed 14-year olds to figure out... which ones are going to pump, which are not and for how long... They may get lucky, and they may not.