A break-out?

[toknormal]

Never rely on one indicator alone. Especially not the MACD.

LoL. That's kind of like saying don't just rely on your ears to tell you a 150mph train is coming round the bend in 20 seconds.

That isn't just *any* MACD indicator. It's a 1-week one. What that means is that it isn't predicting what's happening, it's TELLING you. That kind of momentum doesn't turn around in a few days - or even a few weeks - unless Bitcoin blew up technically.

What's more, the selling that went on during the past few months was in spite of the fundamentals, not because of them. It happened against a background of all kinds of bullish news such as the overstock adoption, senate hearings, Winklevoss ETF progress through the regulatory framework.

ok, there's been some negative stuff as well, but it's all short term and largely inconsequential to Bitcoin's adoption - Gox going bankrupt, malleability histeria, China trying to put their finger in the dyke etc.

So you've had 4 months of downward pressure from 3 short term sources....

[1] - the correction from December's pump

[2] - China regulating their FIAT gateways

[3] - F*ck ups like Gox and the malleability scare

... against a background of growing favourable fundamentals, not least of which is the Winklevoss ETF which will open a massive Fiat gateway into the market (the biggest of which is currently BTC-e and Coinbase   )

All this has had the effect of compressing a coiled spring which is what you're seeing in the MACD histogram there. There isn't any better indicator to demonstrate the aggregate effect of these market influences because you're seeing higher level derivatives of the selling momentum over a long long period, so it runs deep.

It might change course, but only as fast as the world's biggest supertanker at full speed.

[TERA]

It's bad enough that it's such a lagging indicator - you should not pre-empt it on top of that. 'I believe the lagging indicator is going to do THIS in 2 candles from now so I should act immediately' - at least wait until it actually happens and is confirmed. Do not forget all the traps that occured previously involving the 1D MACD and even once or twice with the 3D MACD where it went up but wasn't confirmed or was up for 1 candle and went back down.

[cypherdoc]

Never rely on one indicator alone. Especially not the MACD.

LoL. That's kind of like saying don't just rely on your ears to tell you a 150mph train is coming round the bend in 20 seconds.

That isn't just *any* MACD indicator. It's a 1-week one. What that means is that it isn't predicting what's happening, it's TELLING you. That kind of momentum doesn't turn around in a few days - or even a few weeks - unless Bitcoin blew up technically.

What's more, the selling that went on during the past few months was in spite of the fundamentals, not because of them. It happened against a background of all kinds of bullish news such as the overstock adoption, senate hearings, Winklevoss ETF progress through the regulatory framework.

ok, there's been some negative stuff as well, but it's all short term and largely inconsequential to Bitcoin's adoption - Gox going bankrupt, malleability histeria, China trying to put their finger in the dyke etc.

So you've had 4 months of downward pressure from 3 short term sources....

[1] - the correction from December's pump

[2] - China regulating their FIAT gateways

[3] - F*ck ups like Gox and the malleability scare

... against a background of growing favourable fundamentals, not least of which is the Winklevoss ETF which will open a massive Fiat gateway into the market (the biggest of which is currently BTC-e and Coinbase   )

All this has had the effect of compressing a coiled spring which is what you're seeing in the MACD histogram there. There isn't any better indicator to demonstrate the aggregate effect of these market influences because you're seeing higher level derivatives of the selling momentum over a long long period, so it runs deep.

It might change course, but only as fast as the world's biggest supertanker at full speed.

this is correct.

the higher low drawn on the MACD was one of the first indications to me that we had bottomed out:

[Miz4r]

ching chung ku fung piff paff wing wang i suppose soon we will all be hitting ourselves after huobi shuts down for real and btc is back down, because we neglected these obvious signs including this pathetic rally volume on stamp which is 1/4 of the volume as the volume that the various crashes earlier in the year had. just another day getting goxxed by china and we fell for it yet again. ill order the general tzo's chicken with two spring rolls and a side of crispy duck.

OKcoin has actually higher BTC volume than Huobi these days, it's not just Huobi anymore. And we were getting goxxed all the way to $1200 in November, when so many people thought MtGox was insolvent and would die. It did eventually die but not until making a new ATH and a few months of correcting afterwards, so a crash isn't the only possible outcome when exchanges get into trouble. If Huobi and OKcoin are suddenly shutdown, yes the price will dive. But that seems unlikely though, there are just too many possible scenarios including the one where nothing happens at all until fully regulated professional exchanges start popping up. The coming months will be exciting for sure.

[TERA]

You don't need a MACD. The first indicator was when it finally broke the $380 support and then proceeded to fall only to $340 and then immediately bounce all the way back up, never establishing a new lower trading range.

[cypherdoc]

You don't need a MACD. The first indicator was when it finally broke the $380 support and then proceeded to fall only to $340 and then immediately bounce all the way back up, never establishing a new lower trading range.

yep.  i said one of the indications.

that was a false "throw under".

[log2exp]

My gut feeling is that big guys in China are loaded with coins by now, after months of spreading bearish news/guidelines/rumours. They tested bottom multiple times and accepted that's it for them, no more dump trucks coming as the current state.

They stopped caring about market movement, as they are holding long term. These big guys are not average Joe, they are either senior officials and/or insider traders.

It's unlikely we are going to see any big influence from Chinese government any more, however, selling rumours are way cheaper than building mining farms.

[TERA]

One thing I'm learning with forex trading that I'm getting into now is that candlestick patterns and lines on simple plain price charts are much more effective tools than complex mathematical indicators, which are ultimately derived from the same data.

[LiteCoinUser84]

Could hit $700 quickly imo.

[bitcoinsrus]

My gut feeling is that big guys in China are loaded with coins by now, after months of spreading bearish news/guidelines/rumours. They tested bottom multiple times and accepted that's it for them, no more dump trucks coming as the current state.

They stopped caring about market movement, as they are holding long term. These big guys are not average Joe, they are either senior officials and/or insider traders.

It's unlikely we are going to see any big influence from Chinese government any more, however, selling rumours are way cheaper than building mining farms.

Doesn't china make (or can get - Taiwan or something) the same mining chips for much cheaper (making it possible) to mine any amount of penta hash they want?

[TERA]

If the Chinese really wanted to scare us and milk as many coins as possible then why is it that they never went to the point of saying that exchanges would actually be shut down?

[RockHound]

Hope everyone is enjoying the rise in BTC price index today.

Has anyone else noticed the buy orders on Bstamp?

If you check out Bitcoinwisdom and select 15min charts - The two successive buying amounts looks kind of suspicious?

(2175BTC then 1246BTC) X 2

Is that just a coincidence?

[segeln]

One thing I'm learning with forex trading that I'm getting into now is that candlestick patterns and lines on simple plain price charts are much more effective tools than complex mathematical indicators, which are ultimately derived from the same data.

yeah ,you are right with candlestick Patterns They are a very strong and reliable tool.
I am astonished you noticed this now and not earlier
Basic TA-knowledge

[cypherdoc]

One thing I'm learning with forex trading that I'm getting into now is that candlestick patterns and lines on simple plain price charts are much more effective tools than complex mathematical indicators, which are ultimately derived from the same data.

this is very true.

once you get good at it you can actually begin to read human emotion into the patterns.

[toknormal]

It's bad enough that it's such a lagging indicator - you should not pre-empt it on top of that. 'I believe the lagging indicator is going to do THIS in 2 candles from now so I should act immediately' - at least wait until it actually happens and is confirmed. Do not forget all the traps that occured previously involving the 1D MACD and even once or twice with the 3D MACD where it went up but wasn't confirmed or was up for 1 candle and went back down.

It's not a lagging indicator.

Trading school books define it as such because the MACD algorithm uses historical data to calculate it's output, but the histogram in particular is not displaying a historical property of the market, it's displaying a current one, and the bigger the chart timescale the more current the indication. (i.e. the 5 minute MACD has a huge relative lag but the 1-week has almost none).

The indicator uses the fourth or fifth derivatives of the moving averages and the histogram shows the difference of these, so we are looking at semi-permanent, well established properties of the market (at least in the long range reports) that transcend particular positive or negative fundamentals. It most definitely is something that can be used to "pre-empt" trends.

I agree that waiting for confirmation is important, but even that is a hazy area. Classically it's where the lower and higher order derivitaves cross, but on such a long term chart that point becomes more of a formality. In that chart right there you've got ample confirmation of very fundamental slowing of selling momentum and increase in buying momentum over a sustained period and against a diversity of news both favourable and unfavourable. That kind of momentum isn't going to turn around anytime soon.

[MatTheCat]

That isn't just *any* MACD indicator. It's a 1-week one. What that means is that it isn't predicting what's happening, it's TELLING you. That kind of momentum doesn't turn around in a few days - or even a few weeks - unless Bitcoin blew up technically.

You make lots of valid points, but.....

It might change course, but only as fast as the world's biggest supertanker at full speed.

And in that time that it takes to turn and change course, Bitcoin could be down 50%.

[Arghhh]

That isn't just *any* MACD indicator. It's a 1-week one. What that means is that it isn't predicting what's happening, it's TELLING you. That kind of momentum doesn't turn around in a few days - or even a few weeks - unless Bitcoin blew up technically.

You make lots of valid points, but.....

It might change course, but only as fast as the world's biggest supertanker at full speed.

And in that time that it takes to turn and change course, Bitcoin could be down 50%.

I'm sure there will be $200 bitcoins waiting for you at the end of the rainbow.

[toknormal]

And in that time that it takes to turn and change course, Bitcoin could be down 50%.

That doesn't matter because we're talking about long term trends.

If you're investing long term, you don't care if it goes down 50% as long as it comes back up again. That 1-Week MACD histogram doesn't guarantee that the price won't drop by 50%, but it does guarantee that such a move would be the equivalent of swimming against a very strong tide and is likely to be swept away by same tide in quite a short space of time.

[oda.krell]

And in that time that it takes to turn and change course, Bitcoin could be down 50%.

That doesn't matter because we're talking about long term trends.

If you're investing long term, you don't care if it goes down 50% as long as it comes back up again. That 1-Week MACD histogram doesn't guarantee that the price won't drop by 50%, but it does guarantee that such a move would be the equivalent of swimming against a very strong tide and is likely to be swept away by same tide in quite a short space of time.

If you're long term enough to not care about a 50% intermediate drop then you're long term enough to never want to trade in the first place anyway.

You're not getting around the fact that
a) 1w MACD is extremely lagging (example: During the 2013 correction it turned red around $100. You had precisely 4 weeks before the market turned around, and your best buying back point would have been ~62. If you would have trusted the weekly MACD to buy back, you would have paid a nice 25% premium for the privilege of sitting out the bear market
b) it's pure momentum. At any moment, it can fail you, whether it's on the 2 min chart or the monthly. From a frequentist point of view, sure, I agree: once the weekly MACD turns green, it is more likely we continue to go up than down in the long run, but it's far from some logical kind of certainty.

Which brings us back to the original point: you don't base your decisions on a single indicator. The end.

[toknormal]

Which brings us back to the original point: you don't base your decisions on a single indicator. The end.

I'm all ears.

Please post refined appraisal incorporating the "other indicators"