BTCUSD
On this chart:
- BTCUSD (candles)
- NASDAQ Composite (blue stepped line) for (loose) reference
- BTC Moving Average (white: 50D, Orange: 150D, Yellow: 300D)
- BTC Trends (Green: UP from lows, Red: down from highs)
- BTC Fib retracement from 2017-12-17 ($19891) down to 2018-02-06 ($6000)
- BTC Fib retracement from 2018-02-06 ($6000) down to 2018-02-20 ($11788)
It never was a crash. I repeat: this was not a crash. It was a healthy correction, which we'll call a sanity/reality check.
It seems like the end of an era, which we'll probably come to know as the "innovator" phase in the S-cycle of cryptocurrencies.
"Consideration" has ended and we and have begun "investigation" of DLT (Digital Ledger Technologies, a.k.a "cryptos" for the layman), as illustrated by the intensified interest of officials (from authorities to public systems-makers, e.g. governments and central banks). Bitcoin and friends are no longer exotic libertarian proofs-of-concepts; more specifically the underlying tech is about to become yet-another-department in most states and corporations. Job offers are rising fast. We'll soon see a slew of degrees as early standardization takes place.
There is one implicit (albeit loose, nascent) correlation that we can observe emerging during the last six months. I've displayed the NASDAQ Composite (Stepped Thick Blue line) on the chart. It's pretty obvious that BTC no longer makes moves in a pure vacuum. Some will say that Futures helped movement correlation; I won't speculate on the why and will leave it at the how for all to subjectively see.
Next, let's observe the untenable rise (Frenzy) that peaked on Dec, 17 ($19891). I've retraced the Fib (called 6 shades of red... appropriate don't you think?) down to the low ($6000 on Feb, 6) fifty-one days later. Guess what the 50 Days Moving Average (White line) is currently tangential to? You've guessed it, the big fat downtrend line from said peak (Dashed Red line), which two days ago crossed the 38.2% retracement (Red Arrow) . Just this market's way of telling us that no, this X-mas spike shouldn't have been, were we rational. This is FOMO/FUD for you, and again, let's leave it at that. If you're trading, you know: General Public + Hype(r) Media = Spiky Charts. Name of this game.
They thought that for crypto, sky wasn't the limit? That it would go above and beyond, to the moon? Well, guess again: this white moving average is well-deserved cloud-line. Above: high HODLERS, below: sentient beings. Leave the damn moon alone! Now when we cross the cloud line, eventually, we'll do it as it should be: like a cruising jet-liner. Safe, steady, and sound.
The 150D Moving Average (Orange line, like bitcoin's logo, that must mean something right?) is boring. It's exactly where we stand in price now (Orange Arrow; I chose that value for this very reason, 150D = 5 months, back to late September's low point before we hit mainstream media). It's the one line that's real in this chart, the chosen one that deserves to cross the red downtrend, and breakout from the Fibonacci's.
Lastly the 300D Moving Average (Yellow line) meets the long Up Trend (Dashed Green line) right when it meets the price (Feb 6, green arrow). This is the best candidate for a sane base valuation of BTC: I have no doubt that it isn't worth any less on that date. Call it a baseline support for DLT.
(In the first comment below I'll quickly discuss Volume Profile, in conjunction with averages and retracements.)