tl;dr big movement coming. (Isn’t that every other day though?) I started this analysis thinking we would be going up further here, but now I am leaning the other way due to point #5
Bitcoin is on the cusp of deciding its next move, setting the course for the near future. The direction is anyone’s guess right now, so let’s look at a few pieces of information we have and try to get a clearer picture:
1. The volume’s drying up as everyone in crypto holds their breath in anticipation, unsure of the direction we’ll be carried. We know a large movement is coming to carry us either over 13837.96 or below 9778.49
2. Long/Short positions don’t have many answers to offer either. Longs are establishing support at a healthy low level that implies ample upside potential, while Shorts just received their worst beating in history on June 30th and are currently sitting at historic lows. This information is inconclusive regarding direction, but it does show how poised the market is to embrace either choice.
3. Bitcoin is currently circling the 50% retracement from it’s last bubble popping. We are almost exactly at the half way point between the 2018 low and the 2017 high. Bitcoin briefly broke above the next retracement level at 13275 but the momentum was far too intense to be sustainable.
4. Google Trends shows a steady decrease in attention since the recent peak in hype on June 30th. This indicates a following decline from the Bitcoin price. Countering this point though is the fact that the ‘peak’ on June 30th was less than 1/4th of the attention Bitcoin received during the 2017 run-up, as well as the classic chicken and egg debate.
5. This looks and feels very similar to the peak we experienced in the early summer of 2017, both on technical factors and google trends. There was a similar 3-month period peaking with an attempt at 3000 in mid-June. What followed was a fast 30% retracement, similar to the recent one, and a consolidation towards the end of the month before a steady drop down to the 1800s
While most of these points only provide a clearer picture of the indecisiveness of the market, number 5 is my strongest indicator that we have further consolidation before continuing our bull run. My main reason for this besides the similarities themselves to 2017 is what I believe to be the reason for the similarities. Human psychology, when hijacking the trading of an asset, has a very distinct signature. It is a bubble signature, and it looks and feels and smells the same every time. It’s not a commentary on the underlying asset. It’s a manifestation of human emotion overriding the market. That emotion, especially in group dynamics, has a readily perceivable pattern that looks the same every time, and financial markets are the easiest place to discern and visualize it. This looks like the early phase of another Bitcoin run-up, and with that, another bubble. I believe we will see the 9000 level again in a few weeks. If this moment is not where that trajectory begins, then I think we have one more leg up before we retrace to that level regardless.
Disclaimer: I am a staunch Bitcoin bull in the long-term, as I believe it to be the most trustworthy form of money in human history. I have experienced the euphoria and despair of the last three bubbles, and have come out of each with a greater trust for BTC each time. I enjoy betting small amounts on the short-term movements.
All posts are for informational purposes only and should not be mistaken for investment advice.
Bitcoin is on the cusp of deciding its next move, setting the course for the near future. The direction is anyone’s guess right now, so let’s look at a few pieces of information we have and try to get a clearer picture:
1. The volume’s drying up as everyone in crypto holds their breath in anticipation, unsure of the direction we’ll be carried. We know a large movement is coming to carry us either over 13837.96 or below 9778.49
2. Long/Short positions don’t have many answers to offer either. Longs are establishing support at a healthy low level that implies ample upside potential, while Shorts just received their worst beating in history on June 30th and are currently sitting at historic lows. This information is inconclusive regarding direction, but it does show how poised the market is to embrace either choice.
3. Bitcoin is currently circling the 50% retracement from it’s last bubble popping. We are almost exactly at the half way point between the 2018 low and the 2017 high. Bitcoin briefly broke above the next retracement level at 13275 but the momentum was far too intense to be sustainable.
4. Google Trends shows a steady decrease in attention since the recent peak in hype on June 30th. This indicates a following decline from the Bitcoin price. Countering this point though is the fact that the ‘peak’ on June 30th was less than 1/4th of the attention Bitcoin received during the 2017 run-up, as well as the classic chicken and egg debate.
5. This looks and feels very similar to the peak we experienced in the early summer of 2017, both on technical factors and google trends. There was a similar 3-month period peaking with an attempt at 3000 in mid-June. What followed was a fast 30% retracement, similar to the recent one, and a consolidation towards the end of the month before a steady drop down to the 1800s
While most of these points only provide a clearer picture of the indecisiveness of the market, number 5 is my strongest indicator that we have further consolidation before continuing our bull run. My main reason for this besides the similarities themselves to 2017 is what I believe to be the reason for the similarities. Human psychology, when hijacking the trading of an asset, has a very distinct signature. It is a bubble signature, and it looks and feels and smells the same every time. It’s not a commentary on the underlying asset. It’s a manifestation of human emotion overriding the market. That emotion, especially in group dynamics, has a readily perceivable pattern that looks the same every time, and financial markets are the easiest place to discern and visualize it. This looks like the early phase of another Bitcoin run-up, and with that, another bubble. I believe we will see the 9000 level again in a few weeks. If this moment is not where that trajectory begins, then I think we have one more leg up before we retrace to that level regardless.
Disclaimer: I am a staunch Bitcoin bull in the long-term, as I believe it to be the most trustworthy form of money in human history. I have experienced the euphoria and despair of the last three bubbles, and have come out of each with a greater trust for BTC each time. I enjoy betting small amounts on the short-term movements.
All posts are for informational purposes only and should not be mistaken for investment advice.