Bitcoin is at a crossroads and has been trading very weird compared to prior trading. I'm using the BTCCHINA chart here just cause the data is a bit more smoothed out imo since their is more history, but for all intents and purposes its pretty much exactly the same as huobi/okcoin which are by far the most liquid exchanges. What i mean by weird is bitcoin has not decided where to go even tentativley. 4 weeks of bitcoin not making a new high or low is almost unheard of, especially when its near a prior recent major low. Bitcoin has usually, in the past, reversed and decided its heading quickly and robustly, but at the moment a lot of indecision and hesistance.
Summary
1. ever since going below the 200ma on 6h bitcoin has been in a bear trend. Said bear trend reach a capitulatory low, evidenced by a quick 10% rebound back in mid august. Bitcoin has failed to make a new low, but it has also failed to make any meaningful new highs past the rebound bounce.
2. Bitcoin has continued to make lower highs since the rebound. Bitcoin remains in a bearish trend, and thus any move up will require substantial buying volume to counteract bagholders breaking even, speculators, etc. If bitcoin continues to go down here the long wait between major moves, coupled with the bearish trend could lead to really strong selling.
Short case:
Bear trend
Lower highs everywhere
Good news has NOT been bought up (coinbase in europe, trading swaps approved, BoE overall approval and interest. Draper buying, Circle invites going out and becoming more prolific.)
Bad news, while not directly responsible for selloff, has been affecting sentiment more, even though there has been less (NYDFS license)
Miners continue to put pressure as their scale of operations increases and margins narrow
e.g Before miners could pay 50k a week in utilities but mine 100k worth of bitcoin (note this is an example) so they make 50k, and only have to sell 50k worth of bitcoins to cover expenses. But mining has gotten much bigger now, and margins are less. so some miners have 1mm in expenses, but make say 1.3mm so their margin is only 30%, but they make 300k cause scale is so much bigger, but at the same time they must sell more coins.
TL;DR: Miners must sell a larger % of the coins they mine to cover costs, This evidenced by hashing power going up Incredibly fast while bitcoin has gone down.
Long case:
Bitcoin is flatlining on 50ma out of coming out of a potential wedge
Bitcoin has not made a new low in over 3 weeks, and has actaully remained in a tight 100 yuan range for 2 weeks, that is ages in bitcoin.
Good news has kept piling up
Google trends for the search term bitcoin are trending up again, last time this signaled a buy point
6h RSI triple divergence suggests selling pressure is waning.
Conclusion: I think bitcoin the next big move on 6h will decide where we are in the next two weeks. Bitcoins is at a crossroads. Break below 2857 local lows could see us retest captiluation and go down. stopping the trend of lower would be a huge one for bulls. I am slightly more biased towards Long because of the lack of new lows that have been made as of late, suggesting to me all the big hands who wanted to sell do not feel the need to do so.
Summary
1. ever since going below the 200ma on 6h bitcoin has been in a bear trend. Said bear trend reach a capitulatory low, evidenced by a quick 10% rebound back in mid august. Bitcoin has failed to make a new low, but it has also failed to make any meaningful new highs past the rebound bounce.
2. Bitcoin has continued to make lower highs since the rebound. Bitcoin remains in a bearish trend, and thus any move up will require substantial buying volume to counteract bagholders breaking even, speculators, etc. If bitcoin continues to go down here the long wait between major moves, coupled with the bearish trend could lead to really strong selling.
Short case:
Bear trend
Lower highs everywhere
Good news has NOT been bought up (coinbase in europe, trading swaps approved, BoE overall approval and interest. Draper buying, Circle invites going out and becoming more prolific.)
Bad news, while not directly responsible for selloff, has been affecting sentiment more, even though there has been less (NYDFS license)
Miners continue to put pressure as their scale of operations increases and margins narrow
e.g Before miners could pay 50k a week in utilities but mine 100k worth of bitcoin (note this is an example) so they make 50k, and only have to sell 50k worth of bitcoins to cover expenses. But mining has gotten much bigger now, and margins are less. so some miners have 1mm in expenses, but make say 1.3mm so their margin is only 30%, but they make 300k cause scale is so much bigger, but at the same time they must sell more coins.
TL;DR: Miners must sell a larger % of the coins they mine to cover costs, This evidenced by hashing power going up Incredibly fast while bitcoin has gone down.
Long case:
Bitcoin is flatlining on 50ma out of coming out of a potential wedge
Bitcoin has not made a new low in over 3 weeks, and has actaully remained in a tight 100 yuan range for 2 weeks, that is ages in bitcoin.
Good news has kept piling up
Google trends for the search term bitcoin are trending up again, last time this signaled a buy point
6h RSI triple divergence suggests selling pressure is waning.
Conclusion: I think bitcoin the next big move on 6h will decide where we are in the next two weeks. Bitcoins is at a crossroads. Break below 2857 local lows could see us retest captiluation and go down. stopping the trend of lower would be a huge one for bulls. I am slightly more biased towards Long because of the lack of new lows that have been made as of late, suggesting to me all the big hands who wanted to sell do not feel the need to do so.