BTC still has a way to go down

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
473 9 2
BTC             is under a momentary consolidation period and looks likely to continue its downward trajectory. Market sentiment has generally been dependent on BTC             , so wait for BTC             to reach a stronger level of support. First level found at 10000, with the stronger support at ~8200
Getting really interesting. On 30 min time frame trend seems to be breaking down south.
Nice one. The 30 min trend line was pretty strong. I showed it to some other people. It was one of the best examples of why trend lines ought to be respected.

There is something of a head and shoulders pattern in there as well (or even double heads and shoulders). :)) If this thing breaks well past 12500, we could well see the bulls being demoralised and a massive flash crash.
MaxRobertsDear Captain_Walker
@Captain_Walker, thanks for the positive feedback - didn't expect anyone other than myself to actually read these posts. They were intended as a learning tool,to see where I made the right/wrong call and more importantly, which tools work.

Not sure I quite see the head an shoulders pattern - maybe I'm not being imaginative enough? I could be wrong, but it would seem to me that the more significant factor is that the recent surge had broken a 3 year parabolic resistance line, following the news that CME and CBOE would be launching Futures Trading. If you switch and look at the 1D chart, you can see that the bull-trend was unsustainable and that a subsequent correction was looming - although I take that this is easy to identify with hindsight (I tried to publish an explanation of this today but for some reason the publication hasn't included my parabolic envelope). As you mentioned, it's an excellent example (and reminder) of why trend lines should be respected and it will be interesting to see whether BTC falls back into its parabolic envelope and continues its legendary bull trend or whether it continues in a downward trajectory as you suggested. If the trend continues bearish, the next lines of support appear to be ~8000, 7300 and 5800.

I agree with your identification of 12500 as a significant marker. It coincides with the previous resistant line of the parabolic envelope.
Captain_Walker MaxRobertsDear

The head and shoulders pattern is in there from my perception. Many people create all sorts of rules for drawing these. From experience, when I see it - I see it. I don't care too much about rules for drawing patterns. Even harmonic patterns don't need to be 100% correct when drawn.

As with trendlines there are some traders who obsess about getting it 100% right. Chaos - which the markets is, doesn't obey rules very strictly. Price can disrespect trendlines as well as any pattern I may see. I work on a probabilistic basis. I predict nothing when I trade.

I think the competition has arrived. Most things that have such a parabolic growth have a limited life span. The alt-coin market is collectively likely to outgrow BTC.
MaxRobertsDear Captain_Walker
@Captain_Walker, I was hoping you might shed light on where you see the head and shoulders pattern as I am here to learn :)

RE: trendlines - I agree that the probability of getting trendlines spot on is low. The cryptospace in particular has proven to be dramatically perceptive to news. A prime example being when BTC dropped following the comment by Jamie Dimon, of JP Morgan, that 'Bitcoin is a fraud'. Trendlines do however provide good guidance on rate of price increase/decrease, whether a trend is sustainable (generally the steeper, the less reliable) and the break of a trend line is often an indicator of when a trend has finished. Although, as you said, these are not set in stone and one shouldn't rely solely on these. Momentum indicators and oscillators, however, have not proven very reliable. I have found the MACD in particular to be unsuitable in the cryptomarket, especially when trends have risen so fiercely, as the MACD is not range-bound. Instead, price action and fundamental analysis seem to be king.

If anything, I hope to see BTC drop to new lows to pave the way for the altcoins (and hopefully the bearish market sentiment will weed out the s***coins along with it). BTC still has far too much of an influence on the market, which is why BTC is the first coin I study before doing analysis on other coins. With exceptions, BTC has proven a reliable predictor of the cryptomarket sentiment. By this I mean that it is often the first cryptoasset to respond to any media attention and that the altcoins tend to follow suit.

As for the parabolic trend, you are absolutely right. It's amazing that this trend has lasted for so long.
Captain_Walker MaxRobertsDear

Ooops forgot to post my snapshot.. here it is.

Captain_Walker MaxRobertsDear

I see a double head and shoulders in the daily. The two heads are there. This could mean that this is a market struggling for survival. If that pattern breaks south (and stays south) for a couple days, it could be bad news for those who are long.
MaxRobertsDear Captain_Walker
@Captain_Walker, interesting spot! ... one to keep an eye out for
Captain_Walker MaxRobertsDear

Yeah - things are sometimes hidden in various time frames. I use a six-chart layout on my 49-inch main screen to view different time frames on each instrument. Before I enter any trade, I scan from monthly down to 5 min time frames. At each extreme I've found important things going on.
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