Hello Everyone, long term bear here that has now turned bullish . I thought I would stop by and explain why I’ve recently bought back into the market.
Before continuing, please open the link below in an adjacent tab/window. I would also suggest opening the base image for a financial bubble. Thank you.
When we find ourselves unable to confidently predict upcoming price action, it is often useful to look for comparable benchmarks. Thankfully, (depending on your bags) financial bubbles are highly predictable due to the consistency in human psychology. For Bitcoin , it seems one of the most similar charts we can compare to is the NDX 100. Specifically, the dot com bubble. The charts are eerily similar.
To being, observe the mean trendline on both charts. (Yellow) Both use logarithmic scaling. You’ll see that even over long periods of time, the trends hold.
Secondly, also observe that the tops and bottoms of the mean trend also maintain a reliable trendline over an extended period of time.
In green I’ve identified the first sell off / bear trap to settle on top of the upper mean trendline for support.
Most importantly, in blue, I’ve underlined the first real buy and sell action outside the normal price action that began the bubble. This is present in both charts. If you look closely, you can see that the price has served as the base for the final capitulation and the intersection of the capitulation mean trendline for the NDX 100, many other financial bubbles, and as it seems, Bitcoin . Before the NDX 100 returned to the mean, it tested the resistance much like Bitcoin did within the past week. It failed initially, and then broke through. This is why I believe the current retracement is short lived. Based on the comparison, it seems we are at the very last point in capitulation before returning to the mean. You can see this circled in white on the NDX 100 chart. One last test you could say. It looks as though we will complete a retrace around 3500 or 3600 dollars before retesting the mean. It doesn't seem my legend for my lines published correctly with the NDX chart. If anyone has any problems with the interpretations I'm here to answer any questions.
That being said, I hope everyone has been patient. I hope your backs are still intact. And I hope you can wait just a little bit longer.
Regards,
1MwEWnUWrKXhT3vYF1EedXS7QAYk3PqwQb
Tips appreciated.
Before continuing, please open the link below in an adjacent tab/window. I would also suggest opening the base image for a financial bubble. Thank you.
When we find ourselves unable to confidently predict upcoming price action, it is often useful to look for comparable benchmarks. Thankfully, (depending on your bags) financial bubbles are highly predictable due to the consistency in human psychology. For Bitcoin , it seems one of the most similar charts we can compare to is the NDX 100. Specifically, the dot com bubble. The charts are eerily similar.
To being, observe the mean trendline on both charts. (Yellow) Both use logarithmic scaling. You’ll see that even over long periods of time, the trends hold.
Secondly, also observe that the tops and bottoms of the mean trend also maintain a reliable trendline over an extended period of time.
In green I’ve identified the first sell off / bear trap to settle on top of the upper mean trendline for support.
Most importantly, in blue, I’ve underlined the first real buy and sell action outside the normal price action that began the bubble. This is present in both charts. If you look closely, you can see that the price has served as the base for the final capitulation and the intersection of the capitulation mean trendline for the NDX 100, many other financial bubbles, and as it seems, Bitcoin . Before the NDX 100 returned to the mean, it tested the resistance much like Bitcoin did within the past week. It failed initially, and then broke through. This is why I believe the current retracement is short lived. Based on the comparison, it seems we are at the very last point in capitulation before returning to the mean. You can see this circled in white on the NDX 100 chart. One last test you could say. It looks as though we will complete a retrace around 3500 or 3600 dollars before retesting the mean. It doesn't seem my legend for my lines published correctly with the NDX chart. If anyone has any problems with the interpretations I'm here to answer any questions.
That being said, I hope everyone has been patient. I hope your backs are still intact. And I hope you can wait just a little bit longer.
Regards,
1MwEWnUWrKXhT3vYF1EedXS7QAYk3PqwQb
Tips appreciated.
Comment:
This week's candle has closed. Looking at the chart and making the NDX comparison, it looks as if BTC still need another week of downward retracement. I'm looking for the next weekly close to be between 3600 and 3650 before we start moving to re-test the mean.
Comment:
Not much to see. There are a ton of charts out there looking to overcomplicate things with crystalball like predictions. BTC continues to ride the trendline. It's not recovering like bubbles normally do / other major cryptos. Personally it looks weak to me. My crystal ball prediction is that we may see a decoupling of BTC from the rest of the market this year. If not, 9k by EOY.
It looks like Bitcoin is behaving exactly as expected. A bounce was expected at 3600 and the average bounce price was at 3700. From here, relying on our NDX historical benchmark I expect a sharp rise in price until support is found on the base mean. (Yellow Line)
If you are a risk averse trader, support held on the mean line is where I suggest going long on BTC. For an asset that moves as quickly as Bitcoin, I define holding support as keeping positive price action for a week.
By my observations I expect the the resistance to be broken around the end of the first week of January or early second week. When this line is broken, expect 2 things:
1. A pause from the bulls as the market tests the support line can be held.
2. A small back and forth sell-off from those that were here at the Jan 18 sell-off betting on historical price action.
Lastly, I would like to clear some confusion up on the relation between the stock market and Bitcoin. The stock market does in fact have an effect on the crypto market. Smart investors, hedge funds, etc, are risk averse. Risk in practically every area of business is assigned an absolute value an used as a parameter in calculating return. With a stock market crash / retrace, people will not go into crypto. Smart Investors DO NOT go into riskier trades when the market isn't looking good. Because of this, the positive price action BTC has recently during the stock market dump is promising. Generally only one thing is going to cause BTC flourish in that type of environment. And that is the trend. The price has bottomed and touched the mean. I see this reaction as empirical evidence that we did in fact reach the bottom.
Trend. Is. Everything. You can see for yourself in the NDX chart. It took the crisis of 2008 to throw off the trend and even after it found a new one running parallel.
Happy trading, good luck, stay patient.
Regards.