Bitcoin : where is the price headed, and when to buy ? #FA
已更新
A few people asked me why I mentioned the 7500 to 8500 $ prices to buy bitcoin in my macro analysis of BTC cycles.
I'll elaborate a bit.
Please don't take the arrows on the chart seriously, I'm a terrible analyst. This is just a general idea of where the price could stop (high and low). I mostly want to show the support areas I'm about to discuss.
1) First, we have the CME Gap at 8500-9000$. I do not believe in the need to fill the CME Gaps, there is no convincing fundamental explanation as to why they should be filled, so I don't take it seriously. Still, if many believe in it, or believe that others believe in it... It is somewhat real. Retail traders like me will be influenced to put their buy orders below the gap "because everyone thinks that way".
This leads us to 8500$ as support. But this alone would not convince me.
2) I read the great articles by filbfilb (links below). This is fundamental evidence that price should bottom at 6300$ (lowest possible price).
You should read his articles. He predicted the 2019 bottom (Oh, he missed by 30$ !), and makes strong points for the next bottom at 6300$-7500$.
I'll summarize in my own (simpler) words what I understand of his articles. I'll invite him to correct me where I'm wrong, if he'd be kind enough to do so.
Here goes : a company dealing with the production of raw materials (Bitcoins) cannot simply "hope" that the price will stay above the production costs. It cannot stay passive. It has to take measures to ensure that it can continue running even if price fluctuates a lot.
What can it do to improves the odds ?
- Influence the price if it can.
- Ruin the competition : Pushing the price as close to the production costs ensures that less efficient competition has to give up. Mining pools in China have a production cost estimated at 3150-4500$ / BTC. Yes, that's the bottom price of 2019. Yes, that price will never be seen anymore, ever again. With the halving coming, the new production cost will be 6300-7500$. This is the new rock bottom price of BTC for the next 4 years. Unless there is another factor to take into account, I think you can just ignore any TA or prediction that gives a lower price than 6300$ from now on. The halving is only 10 months away, and the competition is dead, so there is no need to go back to the production costs. Any company will plan its production and sales ahead of time, and if it can influence the price, it will not allow it to go lower than the near future costs - 6300$.
- Use futures contracts to plan production over long periods of time. SHORTing all it can when price is high, accumulating when it's low.
- Now, how would they make the most of their production ? A) Stop selling their production so that price rises (they are the only producers, and thus the only medium for inflation. If they stop selling the production and demand is at least equal to what it was before... Price goes up). B) Sell when the bubble is ripe.
3) Simple TA shows the 7000's as the only strong support during the recent run.
Conclusion : We have 3 supports identified. 8500 is a support, but it could serve only as a bounce until we can reach a true bottom. Next stop is 6300-7500, with TA showing support at 7200-7500$. 7500... rings a bell ? That's where the two price zones collide.
Also, price could simply stop going any lower. So starting investing in the lows of this week (9100) is good already.
My strategy is thus to average out my fresh investment in BTC between 9100-8500 and if 8500 breaks, some more between 7200-7500. I will not bet on 6300. That would break the recent bullrun support and would scare away retail investors. Not what whales & mining pools want just before the halving.
You can check below my other article about the current market cycle if you want to have my view on what to expect in the months to come. Also, an "alt seasons" analysis.
Safe trading !
___________________________________________________________________________________________________________________________
Pay me a beer ? Thanks ! LTC adress : LREWurnbdJ6Mqt8xbuhL6qHGfEHHcN5u56
Will write other articles when I can (Part 3 & 4 of the macro analysis will be written when I can do the research)
I'll elaborate a bit.
Please don't take the arrows on the chart seriously, I'm a terrible analyst. This is just a general idea of where the price could stop (high and low). I mostly want to show the support areas I'm about to discuss.
1) First, we have the CME Gap at 8500-9000$. I do not believe in the need to fill the CME Gaps, there is no convincing fundamental explanation as to why they should be filled, so I don't take it seriously. Still, if many believe in it, or believe that others believe in it... It is somewhat real. Retail traders like me will be influenced to put their buy orders below the gap "because everyone thinks that way".
This leads us to 8500$ as support. But this alone would not convince me.
2) I read the great articles by filbfilb (links below). This is fundamental evidence that price should bottom at 6300$ (lowest possible price).
You should read his articles. He predicted the 2019 bottom (Oh, he missed by 30$ !), and makes strong points for the next bottom at 6300$-7500$.
I'll summarize in my own (simpler) words what I understand of his articles. I'll invite him to correct me where I'm wrong, if he'd be kind enough to do so.
Here goes : a company dealing with the production of raw materials (Bitcoins) cannot simply "hope" that the price will stay above the production costs. It cannot stay passive. It has to take measures to ensure that it can continue running even if price fluctuates a lot.
What can it do to improves the odds ?
- Influence the price if it can.
- Ruin the competition : Pushing the price as close to the production costs ensures that less efficient competition has to give up. Mining pools in China have a production cost estimated at 3150-4500$ / BTC. Yes, that's the bottom price of 2019. Yes, that price will never be seen anymore, ever again. With the halving coming, the new production cost will be 6300-7500$. This is the new rock bottom price of BTC for the next 4 years. Unless there is another factor to take into account, I think you can just ignore any TA or prediction that gives a lower price than 6300$ from now on. The halving is only 10 months away, and the competition is dead, so there is no need to go back to the production costs. Any company will plan its production and sales ahead of time, and if it can influence the price, it will not allow it to go lower than the near future costs - 6300$.
- Use futures contracts to plan production over long periods of time. SHORTing all it can when price is high, accumulating when it's low.
- Now, how would they make the most of their production ? A) Stop selling their production so that price rises (they are the only producers, and thus the only medium for inflation. If they stop selling the production and demand is at least equal to what it was before... Price goes up). B) Sell when the bubble is ripe.
3) Simple TA shows the 7000's as the only strong support during the recent run.
Conclusion : We have 3 supports identified. 8500 is a support, but it could serve only as a bounce until we can reach a true bottom. Next stop is 6300-7500, with TA showing support at 7200-7500$. 7500... rings a bell ? That's where the two price zones collide.
Also, price could simply stop going any lower. So starting investing in the lows of this week (9100) is good already.
My strategy is thus to average out my fresh investment in BTC between 9100-8500 and if 8500 breaks, some more between 7200-7500. I will not bet on 6300. That would break the recent bullrun support and would scare away retail investors. Not what whales & mining pools want just before the halving.
You can check below my other article about the current market cycle if you want to have my view on what to expect in the months to come. Also, an "alt seasons" analysis.
Safe trading !
___________________________________________________________________________________________________________________________
Pay me a beer ? Thanks ! LTC adress : LREWurnbdJ6Mqt8xbuhL6qHGfEHHcN5u56
Will write other articles when I can (Part 3 & 4 of the macro analysis will be written when I can do the research)
註釋
How fast market sentiment has changed in 2 days !FOMO is back.
For now volume is not convincing, we have some buyer interest but mostly short squeezes I guess. I wanted to add two things to original article : 10700 could be a rejection level. It doesn't appear on chart so I thought I'd mention it now. It's still time to take it into account (10360 as I write this, closing my long soon with trailing stop).
Second, wanted to share with you Daveatt's DCA script that you can find here :
It allows you to compare a mindless averaging strategy to your own buying strategy. Results are interesting. And emphasizes the importance of averaging your entries, coupled with FA & TA. I still believe we can reach lower prices, but averaging from now makes sense : we can't predict what happens next, and 9100 could have been the bottom. I'm betting on a rejection at 10700 or 11300, which COULD send us to the final bottom. I've seen a very convincing chart this morning showing a historically high volume pressure at 7900's, so 8000 will be my lowest value when averaging. The drawdown from 8000 to 7500 is so low it's not worth risking missing the rocket.
註釋
A few hours left and we are reaching the top of the channel. Moment of truth. If we break the channel and close above, it will be time to buy with the cash I have left (~10% of my capital), probably no coming back to these levels.If we don't break it, I won't wait for a bottom, we moved up with so much strenght... any decent dip will do.
註釋
I didn't want to get into the TA field on this article, because I'm not confident in my skills in that department. I just wanted to talk about the lowest possible price we could potentially reach. I still did talk about TA somehow, and now I feel compelled to go to the bottom of things.So to the point : we're really knocking on heaven's door. It could crack with those repeated assaults. I hope you bought the dip. I'm keeping one last stack (2% capital) if we go down to 11k.
On other markets I'd expect to first see a small cup & handle (few days) at the resistance before breaching, but this is Bitcoin, so who know...
註釋
Funny to re-read my article now and see how bad I am with TA and managing emotions :)Anyway, just wanted to add this surprising fractal that a friend showed me today. I think it's incredible. We might not follow it untill the end, but if we do... Price could go down to 7500$ very soon.
I don't think I have a confirmation bias, I really find this fractal beautiful !
Overall, I have extremely mixed feelings because fundamental indicators are extremely bullish, while technicals are weak. This fractal could reconcile both if it plays out, so why not !
This is just a scenario though... We trade the market, not ideas :)
Safe trading.
交易結束：目標達成
Target reached for this trade. Bounced precisely on the target price ! (I'm the first to be suprised, no need to act like I knew it all. It's just surprising how the charts never lie : only our emotions can get in the way). To be honest I was aiming lower and I'm left with one open order @ 6850.
So, this idea is closed I think. New idea is the follow-up trade : where is the next macro resistance ? Link here :
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