We can expect a sideways consolidation, or, some kind of correction and retest of support, during the next month, as described here. Today, a support level held, and weekly is still in an uptrend for the next 3 weeks, technically, but sentiment was too positive before this drop, and we had already exceeded all weekly upside targets ahead of time, which usually points to a 'bubbly' situation. I reduced long exposure in BTC to about 20% of the account, exactly 2 days ago. I am now looking to hedge the downside if necessary, on at least half the position, or maybe all of it. Good vehicles to do so are altcoin pairs like ZECBTC, ETHBTC, DASHBTC, XRPBTC, but you can also open shorts against fiat currencies if you trust exchanges with your money. As I pointed out in my previous post, the spreads closing (in relative performance terms during 1 year) signaled something was going on, it wasn't a normal occurrence. Like, everyone bought closing the spread up. Who's left to buy?...
The fundamental situation is interesting but potentially dangerous. Litecoin's implementation of Segwit and the first Lightning network payment lit a fire of excitement, but it can also become a risk factor if this test were to fail. The first flaw that is found in this implementation will accelerate a decline in BTC certainly, so, it is better to be prepared. Most people saw this as bullish, many were celebrating, people in my country were getting together, drinking champagne and celebrating BTC's high prices, and LTC's Segwit adoption like it was the 2nd coming. This was a sentiment red flag for me, which drove me to reduce exposure to be safe. Clearly, I was right so far, since prices fell more than 5% since then. Let's see how it evolves.
Best of luck,
Ivan Labrie.
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ETHEUR is in an uptrend, close to trigger a new short term rally meanwhile...ETF decision might be the spark to kickstart this.
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Shorted at 1600.5 avg.
Another good signal for this top is that people in FB were posting forecasts of Elliott Wave counts pointing to a rally to 50000000usd or whatever random numbers they like to predict.
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BTCUSD rallied more in other exchanges, as a sign of exhuberance, catching up to Bitfinex irrationally high prices This further proves my thesis, of this irrational sentiment top, and the Finex withdrawal + other variables (like the ransomware) being possible catalysts for this bubble bursting...-bubble being the rally from the 29th of April onwards-
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So, my BTCJPY chart's idea, of relative performance being a signal of a big move was correct, we just didn't know the direction yet. Now we do, it's sideways or down, due to Bitfinex.
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In case anyone hates on me for saying this is likely a top, please review my publications before you get upset...
Disclaimer: I'm long BTC, but hedged exposure currently at 1600.5 euros.
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Anticipating the correction bottom, here's long term BTCUSD for your delight BTFD!
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As long as closing above the open, this bar is a range expansion bar, so, we can buy the dip during July/August. Perfectly matches the weekly forecast.
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Sold 100% of BTC and covered my short hedge, so I basically sold BTC for 1600.5 euros for now. Considering my entries, not bad ;)
I will wait for the news and then reenter when I think it's safe. Random chance events aren't my style of low risk investing. No edge in gambling.
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After today's close, BTC is officially in a downtrend.
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I'm long BTC again, since the downtrend failed to materialize, it appears like most investors expected the SEC news this Monday, which are now clearly not going to come out for a while. No one knows the exact date, and the weekly time at mode signal calls for upside during all of May. Will revisit this idea by May 29th.
@svensko, let's see if we can get it right...cheers!
BRRD
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Well done for getting back in so promptly. That's what I find the hardest bit about all this - reversing position on a trade at a small loss (in BTC terms, I presume?).
That takes disciplined emotions!
IvanLabrie
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@BRRD, and a method that is proven to work to do it, in which you trust, and experience. Yes, this is one of the most difficult things.
I calculate profit and loss in USD terms, thinking 'in BTC terms' is a thing a BTC maximalist would do, which is a bit of delusional thinking in my opinion. The kind used to justify being in loss during the decline after 2013.
Yes, price went higher, but that was sheer LUCK. I just bought after the downtrend ended, and not at the top in 2013 :p We can have more or less good timing, and not trade on hope. That is a very dangerous thing.
Cheers.
BRRD
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Bear trap in the making I believe.
And I have to say, not even a very big one by Bitcoin's standards. In 2013 there was a correction of 50%(from around $700 to 350 if I remember correctly) that turned into a giant bear trap within just a few days!
IvanLabrie
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@BRRD, yes, exactly, but it might be a downtrend, for a while, in the daily timeframe. It might turn into a bear trap, after enough time elapses too. Let's wait and see. I sold for now at 1600.5 euros.