BTCUSD update: This market is consolidating within a 300 point range, still within the reversal zone but the longer it stays at these levels, the greater the chance of another bullish breakout.
What about the head and shoulders on the 4 hour chart? There is a head and shoulders formation that should not be ignored, but you have to consider the bigger picture. Price is consolidating near the highs and more importantly, NOT taking out any lows. Even on these wild 300 to 500 point gyrations, this market is still holding up well considering where it is.
The head and shoulders is meaningful, but IF this market does not decisively break below 8k and paint a closed candle on its lows, then it is likely to break higher. Once again a condition like this is conflicting and confusing, but the overall trend carries more weight and is still in play until the market proves otherwise. Day trading is your best strategy in my opinion to capitalize on the minor weakness, while waiting to see if the market takes out any significant lows.
8K is not only an old resistance/new support but it is also the .382 support measured from the 7412 low. If this support is not taken out soon, the market is telling us that it is strong, even in the face of a head and shoulders. Keep in mind that consolidations are trend continuation patterns, not reversals. Price may still be in the reversal zone, but that does not mean it will produce a bearish reversal.
On top of that, it is a holiday in the U.S. which is very likely to affect volume and make for a range bound market. Over the next two and a half days, U.S. participants will be focused on everything but the markets. That is why the stock market closes early and forex brokers widen their spreads. Obviously this holiday is not celebrated around the world, but U.S. volume is a big factor in these markets.Over the years I learned it is best to avoid trading all together during this time. Just something to keep in mind.
In summary if this market is going to be a short, let it make the first move. This means it is okay to miss the initial move which has to break the relevant supports, then look to get in on a shallow retrace (day trading especially). When markets are weak, they reject resistance levels FAST and do not retrace right back to highs in a matter of hours. That is why I am more convinced that this is a consolidation and setting up to make a run for the 8500 resistance level over the next few days (low volume doesn't mean the market won't move at all, it means the movements have a greater tendency to be more random). Do not be confused by the head and shoulders because the general trend is still intact which means at the moment, this market is likely to go higher. These conditions do not fit the criteria of my swing trading plan at all, so I will continue to stay flat.
Marc, Ive been following you (and goldbug) for 6 weeks now and you've made me more patient and risk aware, I've reduced my crypto exposure to 5% instead of 15% of my net worth.
What I wonder: I have seen you staying mainly flat in the recent btc and eth markets, or make some slightly negative swing trades: how/when do you make profits ? Or is crypto just some hobby you can afford to be involved in for fun?
jdharward
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Love your TA and throughout explanations. I see BTC wanting correcting down to 5k or even as low as 3k if the tether/BFX fraud accusations turn out to be correct.
The dip to $5700 on 11/12 was due to market manipulation and only 30%.
That would break with the pattern of 38% decline followed by a new high 161% of the previous high.
She (BTC) just doesn't feel right to me, like she's being propped up but needs to fall. I think we see 6k before we see 10k.
BCH is looking promosing as a short to BTC.
moth_honda
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@jdharward, could you explain further what you mean by manipulation at $5700?
jdharward
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@moth_honda, The weekend of the 12th; BCH was gaining steadidly against BTC all the way to .35. Roger Ver came along and spiked the football up to .47 to .53 (depending on the exchange) with a pump/dump.
ookgezellig
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@jdharward, same here, there something fishy about the whole btc bitfinex tether situation and btc value... I'm staying away from btc, reduced my crypto exposure at large and did some hedging with dash...
LXXe
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@jdharward, do you have ANY basis for your predictions?
- manipulation
- propped up
- promising BCH
it'd be interesting for us to see how you arrived at those conclusion. one more thing about BCH--do you really want to put money on a group of guys (Roger Ver, Craig "Fake Satoshi" Wright, Ayers, Jihan) who are only good at one thing -- marketing. And self-marketing (well, i guess really two things). Do you think that the CORE BTC hasnt evaluated the pros/cons (ie trade-offs) of increasing blocksize? So going long on BCH in teh short term is fine as along as Roger gives you a heads-up each time he's up to another marketing and pump blitz.
thoughts?, pls let me/us know .......
ansonphong
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@LXXe, I have to agree with you that BCH is little more than market manipulation, and has no substance. It fills an unmet need in the market, in that it has low transaction costs, short confirm times, and it has "Bitcoin" in the name. With millions of brand new unsophisticated Bitcoin users, it's easy to pull the wool over their eyes.
That said, BCH has painted themselves into a corner selling it on being decentralized, with low transaction fees and short confirmation times.
They say it's more decentralized when over 50% of BCH is held by South Korean Exchanges, and the 8MB block size is going to make running full nodes impossible for most people, it like in fact BCH is considerably more centralized and will always be that way.
In terms of transaction times and fees, BCH will hit a very hard and un-solvable scaling wall in less than a year at this rate of growth, and then they'll be in EXACTLY the same boat as BTC right now with expensive transaction fees and slow confirmation times when those 8MB blocks are full, meanwhile BTC will have integrated SegWit support widespread and atomic hot-swaps between other blockchains and payment channels which will decrease the cost of transactions and reduce confirmation times.
BCH hit BTC hard as it was experiencing growing pains, though long term I wager to guess that BCH will devolve further and deeper into a cult of personality cryptocurrency probably mostly just used by miners to buy hardware form Bitmain, etc.
I'm flat as well. The last time we were in a range for a bit and I finally bought in to make a quick buck, I ended up losing 4k when I woke up (Gemini doesnt have stops), I had to sell quickly and then bought back low enough to make it all back on the bounce, which ended up going higher, my luck i guess. Still it wasnt worth the heartache so I'm not getting caught on the top again
What I wonder: I have seen you staying mainly flat in the recent btc and eth markets, or make some slightly negative swing trades: how/when do you make profits ? Or is crypto just some hobby you can afford to be involved in for fun?