We're crashing. This is what the 2014 crash pattern projects.

2018年3月18日

This is the path roughly of the 2014 crash. Timing and some of the details would almost certainly be expected to differ.

We have to decisively stay above the 7698 retracement line with more than just a wick and higher volume at longer candles to invalidate the scenario. A similar resistance line at this point in the 2014 crash.

The 2014 scenario looks increasingly consistent now with the ascending wedge that I see a lot of bulls drawing, because we can follow it down to 6800, retest 7700, and fail. Really, we can follow the wedge and retest 7700 multiple times at this point before a full crash happens, and that's consistent with the 2014 crash, where that line was unsucessfully tested on a strong rally off a higher low (~6800 here) before crashing to make a lower low.

Related - BTCUSDLONGS still shows bull leverage holding steady and BTCUSDSHORTS shows bear leverage declining, both of which spiked in the early parts of the drop this week as people presumably placed their bets. Well, we've been going down since those bets were placed. On a backdrop of falling prices rather than a rally, this suggests the bulls are stuck in their positions and haven't let go yet, while some bears are taking profits. That would mean that those bears can get back in at any time we see a break downward, but bulls are overextended and not only have less to work with but will start getting squeezed out at some point if we keep dropping, which would accelerate a drop.


Patterns are correct until they're not. Who knows, maybe the G20 meeting next week is so bullish that it gives the bulls the push they need to stay about 7700. Keep in mind though - Bitcoin is not actually all of crypto. It takes enough electricity to power a small town for a day to process an on-chain transaction. We're looking like we may test levels where it wouldn't be profitable to mine it anymore. At that point, Bitcoin could try to fix itself with more bandages or people could just start using one of the many other high cap coins that don't have these problems, which is in fact the easier market solution (you might even call the global market a decentralized decision-making process). I'm tipping my hand here a bit - but I think Bitcoin is very likely to be remembered some day as the AOL of blockchains - run up to ridiculous heights as the winner of the first generation but obsolete by the time the the first major crash happened. I think this crash is happening now, but I could be wrong and it's the next gold or I could be right about it being the AOL of blockchains and just be wrong about the timing of which crash it will be. If I'm correct, the signal would seem to be that Bitcoin continues to flounder as other major coins one-by-one to start to rebound.

Right or wrong, either direction can be traded. Risk-reward ratios would seem to stem from identifying likely scenarios and setting stops at the point where the scenario in which you're correct is no longer valid.

I'm an amateur and you should definitely not take anything I say as financial advice. I would love any feedback.

2018年3月18日

註釋

In a bit of irony, as I was typing this up, I was missing that we had a big squeeze up starting on the 15 min chart. This brought us so far to the top of the wedge, out of some of the smaller bear flags but still in the really large ones spanning days.

Also, positive G20 news got posted to Reddit. I'm not sure I believe in coincidences about how and when news drops in the crypto world - the technical setup was pretty good at the wedge bottom earlier today and the G20 news was expected *tomorrow*, not today. If someone out there was trying to manipulate a market by pushing it up to the wedge, then selling the news back down...

So, I'm at least slightly wrong about the timing because I didn't expect a real retest of 7700 yet. We still need to finish longer candles above it.

If we break out of the wedge, I'm very wrong. If we drop back down after bouncing off the wedge, then I think I'm still mostly correct, but it does make the scenario where we go to the bottom of the wedge

2018年3月18日

註釋

Another thing to add - there's more than an hour left on both the 3h and 4h candles. If we were to crash rapidly, the squeezes on those charts will still be active. If not, we're either breaking out out or dithering a bit at the top of a giant bear flag inside the wedge.

This seems like a moment where big moves could happen if we break out of defined boundaries a few hundred bucks from where we are in either direction.