Bitcoin Panic Selling has Started, Target Overreaching

已更新

Each attempt to move higher or make a correction upwards is being sold off and the drops are getting worse and bigger with no end in sight. So this is typical panic selling. Now don't automatically think this is good because when everyone is bearish it will just be a matter of time until we rally up, it doesn't work that easily. This market is quite unique, it's based mostly on future expectations and believe. There are not many fundamentals to go on so it's mostly an emotional market, because of that we tend to make extreme moves to the upside (2017) and this year to the downside.

The bear flag of last week has even overreached it's target after it has already made a big drop since we broke the 6K support. Alts are taking very big hits as well at the moment. We had some decent bounces, but they are slowing down as we speak and the chances for a V shape low (on the low time frame) are almost gone again. Because of the big drop we made since the 6K broke, we really need that relief rally (big V shape rally) to even start to think of a low being set. Many people are hedging their crypto assets by shorting Bit(coins). Until these start to close these shorts, we can't say that the low has been set. How can we know when this will happen, if we start to see a very big, fast and high volume rally up. In other words a V shape low.

But don't mistake this for being 100% buying power because it's not, but it would be a first very big step forward. We just made a low to 4200 and bounced up to 4450, which could have been the start of a bigger correction, but just at the previous ones it started to slow down again and go sideways, indicating it will be a matter of time until we make another drop. I don't think these are people shorting it but probably people who are selling because of all the uncertainty at the moment. Nobody can pinpoint a low since we don't have any real fundamentals to go on, so it's more guessing what the other person thinks it's worth and if it has a future or not. Moments like these make crypto believers very uncertain since there seems to be no end to this drop. Making them doubt everything they know and read until now. "Were those Bitcoin skeptics right all along?" "Have we all really been fooled all these years?" I have been getting questions like these the past days. This is normal behavior and i wish i could say don't worry, the low is very close now but i really can't. I have seen several bear markets in my life since the 2000, but as mentioned earlier, this market is unique. There is no way of telling what levels can be reached.

For now it is clear that each move up is being grabbed with both hands to sell their coins, which we can see in the shape of these bear flags and wedges we have seen the past week. So far we almost every bounce from the lows has been around 250 points, so it's safe to say we need a bigger bounce up before we can think this might be over. The current bounce we made gave the opportunity to make a low for at least the coming days, but from the looks of it we might make another wave down. The 4000ish level can be tested as well, rather see it stay above the 4050/4100, showing some inpatient buyers wanting to get in (who do not want to wait for the 4000 or lower levels). We have resistance levels around 4500 and 4700 now.

I have no real targets to go on now, the bear flag on the right has been over reached already. The target of that blue triangle is more difficult to pinpoint, because it's difficult to say if we need to use the log chart or the normal one. Until now i have never used it but at current levels and using patterns from the 6K/10K zone it might be the first time to do it. However, this panic selling tells me the market is not really thinking in log charts. Feels more like 100 points now is just 100 points and not almost 2.5%, where 100 points at 6.500 was just 1.5%. When not using a log chart, the target of that blue triangle is around 4.000. Tether is also dropping again, which creates even more uncertainty in the market and it seems the US is doing another investigation into the Bitcoin' manipulation.

For me it's quite simple now, until we see a bounce of 400/500 points, i won't be thinking the low has been set. To be clear, all the levels i mention, is based on the USD exchanges like Gdax. These are not times to be hoping but making sure you have a plan, to prevent yourself from making emotional decision. Whatever you do, do NOT make decisions based on: "we have dropped so much already now we MUST go up again". Before i forget, maybe we should thank those idiots at the top with their BCH fork, which might have been the catalyst for this crash. Showing the world how a decentralized market/coin can be so easily played with.

Previous analysis:

Bitcoin Still too Weak to Break up, Bear Flag

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To give you an impression of what we need to see to think we might have set a (the) low. We need to see something like i have drawn on the left, a bounce up and after and after making a something like a bull flag, making a second wave up that is much bigger than the first one. Second wave has to be very aggressive. If we don't see that, the chances are a lot bigger we will just continue to drop sooner or later. Because those weak moves tend to turn into bear flags otherwise.

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The current might still work out for the bulls, but will be a very tough one! Needs to break above that blue line to prevent another bear flag

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bloomberg.com/news/articles/2018-11-20/no-end-in-sight-for-crypto-sell-off-as-tokens-take-fresh-hit

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Here we can see some growing interest in the market. Shorts increase, think mostly hedging as mentioned above and the longs have been increasing as well. I was afraid of seeing both drop, because that would say money is fleeing out of this market because something is extremely wrong. At least this shows not everyone is ready to get out. This doesn't help to say what the next move will be on the short term, but i think this might be a good sign, putting things a bit more in perspective

註釋

Moving up slowly, but still fits the bear flag picture. If we break the purple area's, something else should be going on. That could be the start of a bigger upwards correction. But because of this slow movement, i don't think the low has been set. So far still below the red resistance

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Attempt is being made

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4600/4650 would be a big step, that could produce a potential inverse H&S, that could bring it back to 4900/5000. But still a long way to go of course, first step would be breaking this possible bear flag above

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This is the start of a correction now, Bitfinex even touching 5000 almost. Alts are also improving as well now. Still some levels to break to think we are in a safe zone though

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Open Interest on Bitmex dropped during this move up, so it was mostly shorts closing. We need to see this number move up

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I can think of 2 options now, could just be a correction up (can't say where it will/could do) or the low is set. But for that to happen, we have to see the price move towards the 4900 today, where it can make an even bigger inverse H&S. If that would happen, the chances for a V shape low will increase.

Here we can see that example i showed of what we needed to see just happened, a second wave up. This only shows that the speed of the drop is probably over and the bulls are pushing back a bit. This could mean that bears are feeling some pressure now, so in other words the odds for the bulls are improving now (but still not in favor though, need a break of 5000 for that)

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Very strange that the open longs on Bitfinex dropped 8.000 btc during this rally, not really convincing. Don't know what to make of it expect that it is not a bullish sign.

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First of all, there is still a very long way to go but here is an idea. If the bulls can manage to hold these levels we could see an inverse H&S develop. But we still need to touch the neckline again before we start to make the right shoulder. So on Bitfinex those 2 green zones need to hold as support now, otherwise it will probably fail. The hard part was the rally we just made, but this will be a fight as well for the bulls. Alts are also pushing against heavy resistance now.

The open longs on Finex are a bit worrying, not confirming this bullish pattern and the low OI on Bitmex is also not a good sign. This shows the interest is still too low at moment. These factors have weight in this market. So it will be some exciting few hours i think. So if we see one more push up, we could carefully start to think the hurting might be over. I am going to wait patiently on the sideline to see the inverse H&S develop completely before trading it, because now it's gambling, since we still need to touch the neckline again.
USD exchanges have not touched it yet, need to reach 4850/4900.

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Perspective of Feb low, where we had big bounces up and down

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And back down again almost just as fast. Support level now around the 4400/4450 on USD exchanges, There is a chance it might break, than we can test the low of that possible trend line of what i think might become a big bear flag. I think it's very unlikely that we break today's low.

Seems the low OI on Mex and the dropping longs on Finex played a role as well. Bulls had a good opportunity but it's clear they are still too weak.

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Seems Bakkt postponed their launch date to January, 1 hour ago when we were at the high. Great timing

cryptoglobe.com/latest/2018/11/bakkt-ceo-why-launch-of-our-bitcoin-futures-contract-has-been-postponed-to-24-january-2019/

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A follower here explained to me what probably happened with that big drop in open longs on Bitfinex. Seems traders can move positions from the margin trading to the exchange account without showing up in the order book.

support.bitfinex.com/hc/en-us/articles/213895189-What-does-it-mean-to-claim-my-position-

註釋

So we dropped even more, and inside this possible bear flag. The position of the trend line is an assumption. Of course anything can happen, but as mentioned earlier if don't think we will break today's low. If this does happen, we could still make a lower low around 4100/4000, which will create bullish divergence. A much bigger drop would be very unlikely, but these are assumptions, i don't have clear patterns to go on that give more certainty.

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10 mil liqs are starting as wel now, this will keep the pressure on. Until we see those getting bought no way to say where this can end. The bullish divergence option is still an option, but need to stay around the 4000.

Just saw some big buy orders on Mex, but a 10 mil market sell got sold into it while the OI on Mex dropped as well. So that buy order was just a short taking profit. Means there is still no buying at these levels.

These movements are like we had in Jan/Feb, not used to this anymore. Seems we need to adjust to the extreme movements again.

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Looks like a solid triangle here, it can break both ways, at this spot up is in favor normally.

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Seems the triangle was not that solid, where we should have dropped a little bit more, it went up already. Bulls broke that trend line and are trying to move up now. If it stays above the green support, we could see another wave up towards the 4550. I am calling it a day now, good luck :)

註釋

So we have seen some sideways (correctional) movement the past 24 hours. Volume is dropping on the way up and we are already seeing signs of weakness now. This tells me the downwards pressure is probably not over yet (for the short term). Yesterday i mentioned i was thinking of another wave down, what could be the final blow for at least the short term, but we kept moving up in little slow steps. This scenario can still happen. I am not sure of many things now, but i think that if we DO drop, it should be the last wave for the coming days or so.

On the left i have shown an example, of what we want to see if we can think we will see a bigger up move, that is like the blue line. Seeing those waves up NOT crossing each other. Until that keeps happening, we have to assume it's just correctional waves up.

Volume is also dropping on the way up, which is a bad sign as well. We need to see much more aggressive buying and higher volume to think the real upwards correction (wave) has started.

So i will keep waiting for prices around yesterday's lows or maybe slightly below it even. Creating another bullish divergence scenario like i mentioned yesterday.

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The red wave is what we saw the past 12/24 hours, which is what the bulls do not want to see

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And now we are up against that resistance line again. On the left we can see it looks like a inverse H&S, but these usually fail. Even if this resistance breaks, the only way it can succeed is we see a high volume breakout and a move up of at least 200 points without giving away more than 50 points.

So a strong move like the blue line could make this work but if it moves like the red line (not getting above the 4700ish) it will probably turn sideways and slowly turn down again.

OI on Bitmex is still dropping, which is a bad sign as well. Showing there is still nog enough interest at these prices.

On the low time frame there is a small inverse H&S in the making now, this could give that push up. These kind of H&S patterns or not the good ones, when the neckline is moving slightly downwards. It's like bulls peeking over the fence to see if they can move forward against the army of bears, instead of the bulls showing their completely army and committed to crush the bears.

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Still moving sideways between 4550/4350. At the moment at the downside again, think if that level breaks, we might see a big drop towards the lows again. Still weak at the moment and when looking back at that inverse H&S i mentioned above, the right shoulder is getting too big now and that's usually a bad sign! So unless we break that trend line on the upside we will probably test the lows again

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Just as it was slipping away and about to drop, someone on Bitmex pushed the price up with relatively low volume. Other exchanges followed, i have a tick chart i can not post here but will show in my channel where you can clearly see it. Can't say if it means something, but OI increased with 10 mil, so it's at least sure it was a buy order and not a short closing. If this is a whale, we should see follow through within 15 min i think. Otherwise probably just a failed weird attempt

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If this turns into a bull flag at the current level, we could see a breakout upwards, think the 4500 is the level to break for now, that would mean that trend line breaks, then it will depend on how the break out goes, as i mentioned earlier today. A big high volume move up means more upwards movement, a slow lower break up, probably means we will drop later again

註釋

So the trend line has been broken, but so far no big move or high volume. It's still at a resistance here around 4550, so it could be that if we break that level the rally and volume will kick in. But so far, this is not a convincing rally

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Here we can see why a slow low volume move is dangerous. This case it formed a standard bearish wedge which could bring us back to the 4450. if we find support it could still be seen as a pullback retest. But honestly, i don't like it because these are not the moves we need to see for a break out rally.
But there is still a chance if we bounce up with more conviction, speed and volume. Otherwise it will be a matter of time until we drop again