BTC - Looking for Hidden Gems in Trends


We continue to remain bullish on Bitcoin' though many are calling for another leg down. In the broader perspective of the market the trend is still bullish and assuming we have completed wave IV' and entering wave V' going back to 2012 we believe there is opportunity for a new all time high before another major correction.


We have the beginning of a clear fractal count which we at this time are assuming is the first wave of the broader 5th wave count. Currently support has been found at the 0.618 level of wave iii' and we are looking for a bullish reversal signal prior to entering a positional long trade. Those looking to add early before confirmation should use the 9070 level as a stop area as a breakdown of this level would negate the current count. I can not emphasize enough that in my opinion active trading corrective markets is risky and one should understand the risk and have tight and skilled money management in place. It is not about being right or wrong but managing your money to minimize losses.

Shorter term levels of importance are 10339 and 10913 which are the 0.318 and 0.618 levels of wave iv' and 11802 which is the previous top and also a longer term support and resistance level. We maintain our shorter term positional trade target level between 12974 and 13301.

Hidden Trend Lines:

Ignoring the extreme tops there is an upper bearish trend line which has become support for the current breakout. Not all trend lines are equal. Two points are often misconstrued as a trend line and though it can be used as an upper or lower resistance level , we are looking for more than 3 to 4 points to determine the "true trend" and consider the breakouts either noise, or a failed breakout. This is purely subjective as is most Technical Analysis .

One thing that many are good at is pointing out the obvious. Everyone has the upper light blue "trend line" on their chart as a trend line . Other than it being two tops these two points do not form an overall trend of market sentiment. You can see clearly that the current bullish move did not test this resistance area . A trend line to me is multiple points where a top, bottom, or consolidation occurred giving us a perspective of the current sentiment of the market. Often finding a hidden trend line that no one else is looking at can be the difference in following the herd and following the market, or looking for an edge on the market and where longer term money is positioning itself in lieu of shorter term traders. I'm not looking for the obvious trends and patterns I'm looking for those hidden trends that are more indicative of market sentiment.

Clearly the bolder blue trend line is more indicative of resistance and support levels throughout the correction. Currently this trend line has been broken and has provided support of the recent pullback. This is also happening at a critical level from the recent bullish swing. As I have already added a position prior to the market bottoming I am going to exert patience here and look for a signal to validate a bullish reversal before adding another position.

Bottom Line:

Seeing the obvious is easy, finding those signals or trends that provide an edge over the average trader is what separates great traders from average. This takes time and effort, and if you are looking for the obvious, you often overlook the factual. The chart speaks to us, it is our jobs as traders to decipher the chart and look for an edge the majority of the market is missing. This is often the difference in following the herd as they are led over a cliff', or seeing a hidden path to brighter pastures that were left uncovered.
評論: When I say broader market, I am talking longer term. If I was to hand this chart to any professional trader they would go "Wow that is a bullish chart" however somehow those with a whopping 4-8 months of trading experience who can not look past the 1 hour and 30 minute chart to see a bull market if it was a Mac Truck. Look at this chart and go "OHH YEAH THAT IS BEARISH AS ALL GET OUT! BETTER SELL NOW!"
評論: Please for those of you that are bearish in the short term do not take that wrong. You have a valid argument and that is what makes a market. We can clearly reverse here and go lower. I posted this chart weeks ago with both a bearish and bullish count.

Yet anyone can connect dots on a chart and make a "trend line" as was the point of this article. I can make a bullish trend line as well with 3 points.

Bottom line I was clear in the article that though I am long LONG TERM I am either looking for a reversal to add to my long position or looking for a breakdown of the 9070 level which would negate my count. Since we have NOT broken 9070 your assuming we are going lower. I am being patient and seeing what the market does not guessing where it is going.

However again I do understand there are some that are short the market. I have no disagreement with that because they have a valid point. But if all you can do is criticize and offer nothing of value to the conversation then please move on.
評論: Please keep in mind the bearish chart above is consolidated it will be drawn out over a couple months.
評論: Here is a chart of Amazon and all the times that Amazon was going to crash. Look at the chart on the left, looks familiar doesn't it. That was when all the Amazon bears were calling for ground zero. 35% correction looked grim, but then look at the outcome on the right. In the longer term view you could clearly see Amazon was bullish, but many focused on the short term chart, shorted and got crushed! Same thing happened in 2010 when the S&P lost over 50% of its value. Many sold out, but long term the trend was up and those that could see past the hourly chart added at those levels and banked!
評論: I posted this a week or so ago yet it is still relevant. This is a correlation of the 2013 gold correction and bitcoin.
評論: I know many were calling for a correction and I was not. However we did have 6000 on our charts as a low. Normally I would have like I did with LTC have an order at an extreme low, but if you read our weekly report it was clear that the selloff was asset wide, as the VIX spiked and those trading risky derivatives were forced to sell other assets. This was very clear as normally when corrections happen there is a flight to gold and bonds. But those markets tanked as well. This caused the yield on the bond to spike up triggering algo traders into moving money from equities into bond. The whole 3-4 days was a domino effect from the VIX derivatives. All you had to do to see this selloff was noise was to look at all the markets together as I have shown here. The dip was correlated with margin calls that would have likely came in triggering a meltdown across even the crypto space as traders that trade risk equities like the vix trade cryptos as well.

This is why many that just look at charts and have no broader perspective of the markets in general are right from time to time, but do not understand how markets work and how to put it all together. This is where experience in trading these markets comes in, and yes I have traded them all and saw the correlation as it was happening. While many were blaming whales, or patting themselves on the back, I was lucky enough to pick up LTC at 115 ;) Now I had already had the order in but what a gift!!! Why didn't I buy more Bitcoin? Well once a collapse in derivatives happen sometimes it is days weeks or months before the actual damage is felt. Just look back at the housing market derivatives collapse, it was 10 months before the pain was really felt.
Great TA, You have pointed many BTC characteristics. I've already started my own setup on BTC with bullish overlook too.
Thank you!!
You are great.
Don't pay any attention to the haters.
+1 回覆
Vix blah Vix blah blha LOL ;)
Thanks @goldbug1 this is very useful to see in context of other markets.

Assuming your BTC fundamentals continue to grow (I.e growth of network - transactions, addresses etc).

Do you sell entire position at top of next cycle near ATM or continue for much longer time frame?
Here is my Positive feedback, Please can you compare bitcoin, to something a little more similar, because last time I check, the price of a company like amazon , ok ok can be influenced by his technical analysis,(I said it) but is mostly measure by all this thinks that bitcoin does not have.

Sales or Revenue
Sales growth
Gross Margin or Profit
Contribution Margin
Profit Margin
Profit or revenue per employee
Return on Investment (ROI)
Cash flow
Days in A/R (e.g., average of 75 days for collection of money)
Days Held in Inventory (e.g., 90 days of stock on-hand)
Inventory Turnover Ratio (e.g., four inventory turns per year)
Current Ratio (current assets divided by current liabilities)
Quick Ratio (current assets minus inventory, divided by current liabilities)
Debt to Equity

Bitcoin price is ALL CHARTS,no real data. At the extreme that if a solid group of TA, organize themselves, they will influence the path of the bitcoin in the chart.
Mtoa Mtoa
@Mtoa,* all "this things"
@Mtoa, All charts are similar in exponential growth equities and commodities. I could put a chart of oil up there, or gold, or cotton. What drives price is demand and sentiment not fundamentals. Fundamentals can be used to find undervalued assets and Amazon is not one of them.

Amazon is purely a speculative play with a PE of close to 300. It would have to quadruple earnings for 4 years to get to a reasonable PE.

Bitcoin you look at transactions, active addresses and address growth. This is an underlying fundamental indicator of the adoption of asset in itself. This is no different then gold. What makes gold so valuable. Only the fact someone will pay 1330 for an ounce and it has an agreed value between two parties. Same with bitcoin or any other fiat currency.

The big difference is clearly this.

I do not know how much gold can be mined from the ground or the ocean. I do not know how many Euros or Dollars will ever be printed. But I know exactly how many bitcoins will ever be available!

But good question!
+7 回覆
Interesting comparison to gold. Looks like gold has done its wave 1 & 2 up from 2016 and is in its long 3rd leg up now. The correction on gold was only 0.5 Fib, BTC has hit 0.718, but then everything with BTC tends to be exaggerated.
Acel monkia
@monkia, .786 compared to what? summer 2017? If you take the end of the last bear market as a pivot point, its still at .65 .
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