Carnage In The Cryptoverse

Adam Taggart
By Adam Taggart on Tue, Jan 16, 2018 - 8:59pm

Wow -- an UGLY day for the cryptocurrency space.

Most likely triggered by the news in recent days of Chinese and South Korean regulators' plans to enforce much stricter restraints over crypto trading and mining, all of the major coins have experienced painful losses over the course of the day, with many down over 20% in the last 24 hours:

Two hours ago, Bitcoin (BTC) hit an intra-day low of $10,275 -- nearly 50% lower than it was four weeks ago.

Ripple, which Peak Prosperity has declared little more than a scam, traded briefly at $0.93 today -- a far, far cry from its high of $3.71 just a mere twelve days ago. 

Holders of Bitconnect (BCC) just learned today that BCC is shuttering part of its platform, causing folks to wonder if there will be a rationale for continuing to hold the coin. Confused/distraught/angry BCC owners are frantically casting about on the Internet for answers, but so far, few reliable ones are shortcoming.

All of this volatility and panic is little surprise to those of us in the Peak Prosperity community who have been following this space closely of late. 

As we wrote about just two weeks ago, the price of virtually every crypto coin was displaying evidence of extreme bubble mania. We warned folks not to jump in at these prices, predicting a serious correction was highly likely to happen in the near future.

At the same time, our resident crypto expert Mark Rees publicly shared that he had been unloading his holdings given how nuts prices had become in such a short period of time.

He's also on record predicting that 95% or more of the current coins will be gone (i.e., worth $0) in just a few years -- Ripple and Bitconnect appear to be vying hard to be among the first to prove him right.

Those who listened to us/Mark now have the opportunity to buy coins at huge discounts today vs just a week or two ago. Of course, the carnage may have a lot further to fall, so we're not calling a bottom or advising folks to jump in and buy wantonly at this time.

Our main advice to those who think there is long-term merit to the blockchain and related technologies (and we do), is to get educated.

Follow Mark, Davefairtex and the other knowledgeable voices on PeakProsperity.com. Read websites like Coinmarketrecap.com. And watch our growing webinar series on cryptocurrencies (Round 1, Round 2). 

There is certainly continued risk of hitting a capitulation point where the millions of accounts that were opened over the past two months to purchase crypto coins at their all-time high will start selling in desperation, trying to get some value back before their coins experience even further losses.

If we hit that point, prices could easily fall in half again from here...

166 Comments

Snydeman's picture
Snydeman
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OMG

"It can be used for printing colorful toilet paper, or Federal Reserve Notes. But I repeat myself."

 

You, sir, win the Internets for today.

davefairtex's picture
davefairtex
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google trends

Yes I really like google trends as an indicator.  That is one reason why I feel the top might be in for a while.

I do wonder if people at google have self-monetized realtime access to this.  They have definitely disabled the ability to automatically download the bits from their engine, which hoses my particular application.  If I could get it at the hourly level, it might really be decisive.

Fun searches are: "buy bitcoin" (which I think is a leading indicator - people wanting to jump on the bandwagon) - as well as "bitcoin price" (people who are already in, trying to see if they are rich yet).

Dave

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PaulJam
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Shhhhh!

Folks - maybe its best to keep it down about the relationship between Google searches and bitcoin price.  Eventually someone will try to game/profit from the relationship by spoofing multitudes of Google searches and trading off the market reactions to spoofed search frequency data.. indecision

mrees999's picture
mrees999
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Google Changes

I wonder if Google Trends problems are related to their reorg of the entire 'fact check' problems they've had.

They seem to be ending some functionalities.

http://dailycaller.com/2018/01/19/google-ends-fact-check/

 

 

mrees999's picture
mrees999
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Keep fighting the good fight.

You are doing fine work with keeping the warnings of financial manias present in your guidance for your family and friends. 

By the words you use and the references you make, it seems you believe bitcoin is at war with governments and the entire financial world.  It's not.  It's just an alternative. There were some early radical people in the first couple of years that boosted it. Without them though in the earliest years it might not have caught on. It needed somebody to believe in it. So it found it with the somewhat radical anarchist and criminals for the first use-cases. With some people, that's where they are stuck in their thinking that it is still 2013.  Time in the blockchain runs 10 times faster so it's been 50 years in blockchain time and several generations of discoveries and use-cases. 

One glimpse to put it into perspective is to look at a one-page infographic of the blockchain ecosystem. You are speaking of one technology for the first generation. We are now well into the 3rd generation with gen 4 on the drawing board - Web3 being tested by several groups and gen 5 concepts now beginning to consolidate.

https://techcrunch.com/2017/10/16/mapping-the-blockchain-project-ecosystem/

Welcome to the future

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AaronMcKeon
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Fundamentals

So I originally bought into Bitcoin because I believed it was a viable alternative to fiat currency and another bet against the central banking system besides gold, not because I was trying to make a quick buck. I have to admit I was planning on holding for a long while, but I've recently found myself questioning those fundamentals mostly because I didn't appreciate the challenges surrounding its scalability and energy intensity. With my beliefs in the fundamentals shaken, I just liquidated all of it between 12-18k into gold (which for me was a hefty gain so I won't complain). I still do believe in cryptocurrency but am unsure on exactly which one, so it's back to the research phase for this guy. I'm bummed I couldn't make the webinar but perhaps I will find some time soon to check out the playback.

I'd be curious to get people's opinions on which cryptocurrencies they feel are best equipped to be both adoptable and scalable, and specifically where hashgraph technology may fit in.  I'm still very interested in keeping crypto in my portfolio.

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New_Life's picture
New_Life
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Tread carefully.... Tether timebomb

Are the rise in Crypto markets since last spring leveraged & supported by a shady group creating USD equivalent claims, currently at a faster rate than the Fed?

Along with futures shorts closing at the end of this week, this could cause an almighty crash, I have already started to take some recent Crypto profits back to fiat for a while, ready to buy any dips whilst the dust settles....

http://stockemperor.com/currencies/tether-printed-more-usd-us-government/

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'Panicky' Crypto Investors Furiously Exchanging Coins for Gold

Take this with a grain of salt, as The Sun is not a beacon of high journalism, but I'm familiar with many of the legitimate sources they quote in this article. Also, the piece links to a similar article from The Times (which is premium, else I'd post that one instead):

GAME'S UP? Panicky Bitcoin investors struggle to withdraw cash from money exchanges as they look to ‘safe’ gold investments amid fears of cryptocurrency collapse

THERE are mounting fears that Bitcoin investors will struggle to get their cash out after the cryptocurrency's value fell 40 per cent in a single month.

Many are looking to put their money in gold instead, with some European gold traders reporting a "five fold increase" in demand amid fears Bitcoin could collapse entirely.

Concerned investors have since taken to social media to complain they fear losing anything from a few thousand dollars to their entire "family savings"(...)

This uncertainty is driving Bitcoin owners to invest in the more reliable gold, according to Daniel Marburger, director of Coininvest.

He told the Times how he sold 30kg of gold worth around £1million on "one crazy day" - January 16.

Investors are believed to mostly be exchanging their Bitcoins for sovereign coins of gold Britannia, one ounce of which is worth around £,1000.

Click here to read the full article.

Simply as a supportive anecdote, several of the active crypto traders who attended this weekend's series of Summits mentioned they, too, were also currently engaged in exchanging some of (I don't know the amounts or the frequencies) their coin holdings for gold.

davefairtex's picture
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tea leaves

My tea-leaf reading of the metadata says that each dip is being bought less enthusiastically.  That's not a work of genius - you can do it too by looking at the mempool.  I just have it a bit more automated.

https://dedi.jochen-hoenicke.de/queue/more/#1w

The falling mempool chart tells us that all those "stuck" transactions are now finally being processed because the capacity of the network is just not being used by traders that want to trade today.  Right now, transactions of 20 sat/byte are being processed.  Remember two weeks ago when the fee was 600?  That's what I mean.  And that's bearish.

If this continues, the previous low of 9k will not hold - traders (shoeshine boys giving up?) eager to get out will sell every rally - further dampening the spirits of the dip-buyers.  That's how "the right side" of a spike like this works.  We saw a similar pattern in silver in 1980: repeated hopeful bounces, each fading away, with each peak lower and lower.

Of course it could change if money floods back in.  I'm keeping my eye on the whales.  If they start buying in enough size to move the needle, I should be able to spot it.  At some point, they may decide to rotate out of ETH and move back into BTC.

I think Mark might have mentioned this strategy...guy knows his stuff...can't complain about a 3-bagger...

 

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USDT

New_Life-

I don't have any special knowledge about Tether - we've probably read the same things.  3 options:

1) the USD exists in a secret bank account somewhere to back up USDT 1:1.  I think that's unlikely.

2) its just a ponzi scheme used by the more-iffy exchanges that don't have a USD banking link because they don't comply with AML - but the demand for a stable cryptocurrency is immense and so far, its worked.

3) funds exist to back each USDT, but they aren't USD - they are bitcoin or something else.  This works, until prices crash in the thing that supposedly backs up USDT, and at some point confidence cracks, everyone runs to cash in USDT, and a bunch of iffy exchanges probably blow up as a result.

I think at one point, USDT really did have dollars to back up USDT.  But then their banking links were severed, and they've been operating without any audits for quite some time.  "Trust us."

The US Fed came into existence in order to prevent bank panics.  No "Fed" backs up the iffy exchanges.  If the market blows up, and they've been operating a fractional reserve system (or a ponzi scheme), people who think they own things at the iffy exchanges will find out that they don't.

Which is something Mark has been saying forever.

 

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Carnage?

I find the use of such terms as carnage to be less than useful and inflammatory. It is an expression of business as usual

I acquired my first btc when it was selling for $10. I had alerts on my phone set for $1 then $5 then I discarded them. I have seen what are called bubbles form and pop. I remain unfazed. 

My interest in the blockchain ecosystem arises more from a philosophical point of view than financial. It is a truly democratic space. In the Middle ages serfs were tied to the land. In "modern " times serfs are tied to the currency through debt. The aristocracy has claimed for itself the power to create money and this is the source of their power and control. 

There is a revolution taking place and as Andreas Antonopoulos has said the aristocracy are only interested in business as usual. It would seem our interests are diametrically opposed to business as usual. In the neofeudalist model serfs if they are good at operating the squirrel cage get rewarded with a little bit more of illusionary freedom. The crypto currency ecosystem offers a truly unique opportunity for individual and collective freedom.

It is somewhat surprising that this site fails to analyze the truly visionary aspects of blockchain technology and instead focuses on the business as usual "boring" speculative nature and financial components. I find it evidenced by the attempt to apply technical analysis to the market.. Instead of focusing on the financial aspects, which is actually one small component, or bashing it because you know nothing about it it would be far more productive to take a trip down the rabbit hole and explore ALL the possibilities of a technology which is really in its infancy.

One would hope that the collective brain trust here would shift gears and recognize that blockchain technology is the pitchfork with which the serfs could storm the castle and establish a truly democratic society for the first time in history. There has been , is not and maybe never will be such a pitchfork.

My opinion such as it is, is that the universe has presented us with a golden opportunity. BUsiness as usual, normalcy bias has never effected any change. It is always the mutant gene which creates progress.

New_Life's picture
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Inflammatory headlines

Have to agree, I think the use of the word "Carnage" is inappropriate in this instance and it could easily be viewed as a headline in a tabloid rather than PP.

When ETH is 50% of its previous yearly low for a sustained period we should then question it's long term viability....

New_Life's picture
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davefairtex wrote: Yes I
davefairtex wrote:

Yes I really like google trends as an indicator.  That is one reason why I feel the top might be in for a while.

I do wonder if people at google have self-monetized realtime access to this.  They have definitely disabled the ability to automatically download the bits from their engine, which hoses my particular application.  If I could get it at the hourly level, it might really be decisive.

Fun searches are: "buy bitcoin" (which I think is a leading indicator - people wanting to jump on the bandwagon) - as well as "bitcoin price" (people who are already in, trying to see if they are rich yet).

Dave

Just a thought, do we think Wall St and investment firms with very deep pockets need to Google "How to buy BitCoin"?

That said we all know they make money on the price going both ways....

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davefairtex's picture
davefairtex
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leading price

New_Life-

If the google trends data wasn't leading price, I wouldn't pay any attention to it.

Since the google trends data does appear to lead price - you can feel free to rationalize why it's probably not important if you like, but I prefer to pay attention to things that work.

That's why Chris thought I'd enjoy the data.  He knows I like to get an edge using data.

Of course, not everyone is like this.  :)

 

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New_Life's picture
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Enjoying the data
davefairtex wrote:

New_Life-

If the google trends data wasn't leading price, I wouldn't pay any attention to it.

Since the google trends data does appear to lead price - you can feel free to rationalize why it's probably not important if you like, but I prefer to pay attention to things that work.

That's why Chris thought I'd enjoy the data.  He knows I like to get an edge using data.

Of course, not everyone is like this.  :)

 

Sorry if it came across critical not my intention at all. TBH, I love that sort of stuff, very Freakanomics.

Have we measured it's coefficient?

As good as GDP Vs Energy used?

Would like to see similar plots for that regarding ETH.

Any hints of what might happen after this Friday's Futures close, expecting February could be interesting if there's new inflows from both Corporate and the "little people".

SALT Lending currently in Davos at the WEF, who knows what attention they'll be getting....

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davefairtex's picture
davefairtex
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google trends

Using the Mk 1 eyeball I can see the google trends data tends to lead price.  I haven't done a study, but I do refer to it now and then to see which way the trend is going.

Ultimately, trends boils down to "dumb money" to me.  As you say, goldman isn't going to do a google search on buying bitcoin - but the dumb money sure will.  "My friend told me about bitcoin - how can I buy me some of that using my credit card again?"

And when the dumb money impulse fades, who will the whales play their games with?

(Amusingly, that search: "buy bitcoin with credit card" topped out right at the bitcoin high.  Tell me that's a coincidence)

FWIW, it looks as though the shorter-term TX counts are starting to level off.  10k might be a more durable support level than it first appeared.  Jury is still out though.

Buy signal in ETH on the daily chart, FWIW.  I don't have as many tea leaves for ETH vs BTC, but the code does seem to do a reasonable job for ETH.

 

Mohammed Mast's picture
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Mohammed Mast's picture
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New_Life's picture
New_Life
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Thanks Dave! :-)

Appreciate the analysis & comments.

Stumbled on this yesterday, slightly embarrassing statements in there from the Gold council. IMHO - it feels like they are worried. However, how long before BitCoin & other cryptos are surpressed in the same way as Gold?

https://www.gold.org/research/cryptocurrencies-no-substitute-for-gold

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Interesting Article

Interesting article from Daniel Jeffries:

https://hackernoon.com/how-i-saw-the-crypto-market-crash-coming-five-hou...

In general his writing is worth checking out:

https://hackernoon.com/@dan.jeffries

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suppression

I think the new regs in South Korea and China are an attempt to do just that - suppress the money flows into crypto.  "You have to blow a bubble in the stuff we like - not this new, random thing that doesn't give any of us - or our friends - any return at all."  Curious they are trying to stamp out arbitrage though.  That's what the "no foreign crypto selling" is all about.  SK prices are much higher than the rest of the world.

There's probably also the concern over "dumb money" taking very large losses on a bubble pop - with riots and unhappiness that goes along with large losses.  And again, the usual insiders don't benefit, so that's a no-no.  In property bubbles, there are lots of insider-winners, so they are a good thing.

I also agree with your sentiment on the gold article.  Mainstream gold suppliers are worried that their goldbug buyers are going to jump ship.  Goldbugs tend to be counterculture cranks, and so does the crypto crowd, so ... that's a match, at least.

FWIW, most of my short term indicators flipped back to sell.  That 10k level sure better hold.  Bottom-feeder TX fees are down to 8 satoshis/byte (!) and short term TX counts are plunging once more.

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Time for another pull down?

ETH firing on all cylinders today. Up almost 50% since I bought some of the dip when this article was first published.

We could see ETH surpass Gold price again this week, and with that I feel it could be very toppy and ready for another pull back as it will be breaking out of its 1d Bollinger band.

Also more news on Tether, the so called audit company Friedman are no longer associated with Tether. Yet to see a response on that other than BTC is being priced differently on exchanges....

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Opinion piece on the Weiss ratings...

Worth a read.. some good points I think;

https://bitcoinmagazine.com/articles/op-ed-weiss-cryptocurrency-ratings-...

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eth update

New_Life-

You inspired me to go back and revisit my 4h ETH forecaster this weekend.  I was concerned that it wouldn't do so well because I don't parse the ETH blockchain, but it turned out to be surprisingly accurate.  And up until this most recent update, the 4h ETH forecaster was in an uptrend.  The daily ETH forecaster remains in an uptrend.  Overall, I'd say the chart looks a ton better than bitcoin.

Mohammed Mast's picture
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We don't need no stinkin charts.

I find it incredibly ,at once hilarious and then astounding that there is an elephant in the room and all anyone can see it the tick crawling on its back.

We are in the early stages of what could be the most disruptive revolution in the histroy of man and all anyone cares about is what is what some technical analysis charts may or may not be saying.

Unbelievable.

No intelligent discussion of Wyoming going all in on crypto. interoperable chains of chains which would be incredible. Russia's ministry of finance aprooves of  crypto trading in opposition to the central bank. John McAffe's predictions for the future. 

God there are so many developments everyday and the focus on this site is technical analysis and carnage.

Ciao I am onto more fruitful endeavors

 

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feel free to ignore

Feel free to ignore my posts.  I'm ignoring yours.  All I see is the titles.  If you ignore my posts, you won't have to see all those charts you don't like to see.  All you will see is the titles, and your life will improve instantly.  Just like mine did.

Of course if you are desperate for me to get some message, you can always put it in the title, like you did today.

 

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btc @ 10k

My last chart showed a sell signal at about 11.5k, which turned out to be a pretty good signal.

Right now bitcoin is through 10k (its 9800) and I'm not seeing any of the usual signs of buying - not in the fees, a slight uptick in transactions (but nothing like what happened the last 2 times we were at 10k), in short, my tea leaves are suggesting that unless buyers suddenly decide to show up now, 10k is probably not going to hold.

[EDIT] I was wrong, my fee display didn't update - the last 3 hours has seen a great deal of fee volume.  We may get a bounce off 10k after all.  It isn't quite as enthusiastic as it was on the 24th, but it isn't horrible either.  I'd give it 50/50.

However, dumb money interest continues to slide.  Google trends confirms - "buy bitcoin", "bitcoin price", and just "bitcoin" are all at month lows.  Bitcoin went from blazing hot to "nobody cares" in the space of one month. Dumb money has utterly lost interest.  Perhaps it was the 50% drop from the highs.

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BTC -> gold

I'm glad I exchanged 80% of my BTCs for old-school gold a few weeks ago.  As soon as there's a small upturn I'll exchange another 10%.  I'll keep a small amount just in case BTC/LTC/ETH/etc explodes again.  I intend to buy some property with my 1000% profits.  I don't want to wait months or years to get 1100%.

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btc big picture: you are here

If 10k support falls, then we're probably going to head quickly down to 7500.  Bitcoin has these really impressive bounces off support.  Just saying.  Not financial advice, of course.  Its bitcoin we're talking about here.  And who knows - 10k support might hold.

But if you liked it at 19k, you've gotta love it at 7500, right?

We'll have to re-evaluate the picture when the bounce happens, to see what the buying interest looks like.

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bulls win, bears win

skipr-

I'm glad I exchanged 80% of my BTCs for old-school gold a few weeks ago.

I'm glad you did too!  Great trade.  The old saying in the market is, bulls win, bears win, pigs lose.

 

 

 

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Thanks Dave, bye bye MM

Hi Dave

Glad you're ignoring unnecessarily hostile and unhelpful posts.

Really appreciate your continued contributions here, we (me & others in Mark's group) find them useful indicators to judge the mood of the market and to see how much is rational optimism vs irrational exuberance. Total market cap is another handy barometer.

Mark has shared that with the most recent dip he has read that some misguided people are again in great stress having risked too much money, some worried about keeping their homes. These people need protection from themselves and their emotions. This level of recklessness cannot be good for sustainable growth and respect for the industry, I can see greater regulations coming in.

For ETH a useful signal I've seen for trends put to use is EMAs (13/49) on the 4hr combined with simple RSI. Seems to work on the 1day and occasionally on the 1hr.

I continue to be impressed at ETHs steady rise against BTC over the last 6 weeks, I wonder if that trend will gain traction for the rest of the year...

ETH's certainly weathered the January storms well. Up 50% overall against the dollar in just a month?

ie $730--> $1100, not too shabby in a month of "Carnage"

Thanks again,

NL

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trading & emotion

New_Life-

Thanks for the kind words.  This stuff is really hard, entirely because of the emotion involved.  Intensity of emotion is driven by position size, and if your position size is "too large", it does a real number on your equanimity.

Managing emotion is the key to trading.  I know myself - I'm way too emotional.  That's why I wrote all this code - to provide me a grounding that is unbiased and emotionless.

Some people deal with their emotions better than others.  Mark has his way (or else he would not have survived this long in his position), and MM has his way too.  Perhaps if MM weren't under such stress, he wouldn't be such a colossal penis.  Mark manages to hold it together - somehow - and remain a pretty nice guy.  I don't know how he does it.  Both of them are operating under stress after a 50% drop.  Even if they've been through it all before, and even though the mantra is always "HODL", a tiny voice inside them wonders, "but what if THIS was really the top?"  Maybe not such a tiny voice.  And so whenever my chart issues a sell signal, I'm guessing that voice gets a bit louder, and the stress level rises, and so "some of them" lash out in response - as a way of letting the pressure off.

BTW, the "HODL" mantra is a survivor bias thing.  Anyone who didn't believe in HODL was weeded out two 60% corrections ago.

When you have a very large position size, the emotional highs and lows must be incredible.  I say "must be" because I've never experienced them, and knowing my personality, I'd have bailed out back at bitcoin $1000 in 2013.  Maybe earlier.

So while I ignore MM because there's nothing gained in engaging with obnoxious people, I do have sympathy for where he is.  It can't be any fun.  If he sells it all and then bitcoin moves to $100k, he'll feel stupid.  If he doesn't sell, and $19k really was the top, he'll feel stupid too.  And now he's down 50%.  That voice is probably getting louder.

Me, I don't have an opinion.  I'm not smart enough to predict price longer term.  I just assess aggregate emotion at the current moment based on the tea leaves I've collected.

I do think that this downtrend won't stop until all that dumb money is thoroughly rinsed out.  When the last of them sells - emotionally crushed by the "sure path to riches" that ended up being such a horrible, devastating trap - that will mark the low.  Its just what markets do to people.  They always act to hose the majority to the largest extent possible, and when such a large flood of dumb money rushes in, it is sure to end in tears.

I also suspect that some of this move down has been engineered by the whales, who know very well just how to rinse people out.

Regarding ETH: Mark made the million-dollar observation, which is that ETH will act as a refuge when BTC blows up.  My question is, at what point will the flows reverse?  At what point will all that ETH be cashed in for BTC?  The ratio chart bottomed out right at support.  Pretty cool.

FWIW, the ETH 4h chart remains in a downtrend...but that ratio chart remains quite bullish.

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Mohammed Mast wrote:I find
Mohammed Mast wrote:

I find it incredibly ,at once hilarious and then astounding that there is an elephant in the room and all anyone can see it the tick crawling on its back.

We are in the early stages of what could be the most disruptive revolution in the histroy of man and all anyone cares about is what is what some technical analysis charts may or may not be saying.

Unbelievable.

No intelligent discussion of Wyoming going all in on crypto. interoperable chains of chains which would be incredible. Russia's ministry of finance aprooves of  crypto trading in opposition to the central bank. John McAffe's predictions for the future. 

God there are so many developments everyday and the focus on this site is technical analysis and carnage.

Ciao I am onto more fruitful endeavors

 

MM,

1)  No one is denying the possible disruption to the existing system that cryptos represent. Most of us recognize its potential, and many of us would love to see it succeed. It has a ways to go before it usurps the king, though.

 

2) Some of us are worried about the cryptos as investments rather than tools, especially investments that are designed to make easy money quickly; ie, highly speculative investments. So, there’s a difference between people’s attitude towards the asset itself vs. the investment market surrounding, and sometimes at best loosely attached to, that underlying asset. I think houses are wonderful, but the MBS market is a sham and a shitshow.

 

3) Charts and technical analysis are what DaveF does. History is what I do (and I’m sometimes good for gallows humor and a deep, pervasive pessimism). Each of us here seems to have certain areas of knowledge and “approach vectors” we bring to the table. If you have a problem with an individual, /ignore them. I embrace the quirky diversity here, because I’m weekly forced to think outside some box I didn’t even know I had, or refine my own thoughts during some discussion, etc.

 

4) Speaking of history, you need to do some serious reading and studying if you think cryptos are the “most disruptive revolution in the history of man.” The disruption of intensive agriculture, fire, the printing press...each of these was very, very disruptive, so I’d take care before throwing that kind of grandiose assertion around so casually. I’d settle for one of the most disruptive revolutions since the printing press or the internet, perhaps, but again, the king’s still looking mighty comfortable on that throne.

 

5) You own BitCoin, I assume? If so, you benefit from there being ample amounts of excited buyers entering the market, right? I’ll put it out there that I find advice that grants a monetary reward to the advisor, in direct or indirect ways, to be worthy of skepticism. Please forgive me if I don’t jump onto what seems quite the marketing campaign by “hodlers” designed to convince everyone that BitCoin et al is the next Jesus. I think it has a lot of potential, but also a lot of problems, and maybe someday I’ll join this revolution once I’m certain the powers that be aren’t managing to subvert crypto for their own designs...which they seem to be busy trying to do. I sure as hell know better than to fall for any get-rich-quick schemes.

 

As always, your results may vary.

 

-Snydeman

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davefairtex
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entry points vs "knowing the future"

Let's say that at the turn of the century, you had a crystal ball and you knew that the Internet was going to be the thing, and you also could see that Cisco Systems was going to run the whole ball of wax.

Based on your dead-certain knowledge of the future and how everything was going to work out, was CSCO a buy at 80?

Of course you know the answer.  Even though you were 100% correct about the real world outcome, if you choose a bad entry point - even though you picked the company that would end up winning everything - you lost 50% over a 17-year period.  And that's after a huge bull market in equities 2009-2017. 

The takeaway: entry points matter.  Prices matter.  If you buy in too high, you're basically dead, no matter how "right" you happen to be about the long term outcome.

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davefairtex
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headfake

All of my short-term models flipped to buy earlier today...just in time for bitcoin to break fairly convincingly below 10k.  The daily model was the only one to resist, and that - not by very much.  There was support at 10k, just not enough.

If we lose the 9200 level...it could get ugly, but that might take some time - we could see a bounce off 9200 similar to what we saw off 10k.

"If you liked bitcoin at $19k, you've gotta love it at $9250..."

 

New_Life's picture
New_Life
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Little support and India FUD

India's latest news today hardly helped the situation.

This guy's TA BTC review (low sound volume) shows little support at 9k... 8.3k could be more likely to shake out the December noobs.

NB: I was one of them, bought at $11k, sold at $16.5k mid Dec to switch & follow the ETH Uptrend.

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cmartenson
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Bitcoin breaks below $9,000

The most concerning article I've read about Bitcoin is in regards to the highly suspicious timing of massive Tether issuances...nearly a half billion in one week.  But don't worry, the Tether folks say they are to be trusted and that they are routinely audited by trusted third parties.

Well, they were, I guess, until the last one quit.  They'll get another new one soon...

At any rate, the TL;DR version is that these massive Tether issuances came during key breakdowns in Bitcoin that then magically reversed.  I don't know...an unaudited, unregulated exchange that unleashes massive buying power at key moments....

The short version is that it takes roughly $18M of new money flows each day into Bitcoin to hold it flat.  Tether was responsible for up to $100M per day during key moments.  Do the math...

At any rate, here's a snippet of that article:

In effect, Bitfinex has been accused of creating tether out of thin air, without corresponding US dollar deposits, in order to pump up the price of bitcoin.

While Bitfinex insists all new “USDT” are backed by real dollar deposits, new tether issuances have coincided with dips in the price of bitcoin. Last week, an anonymous analyst backed up those claims in a report titled “Quantifying the Effect of Tether”, which concluded that it was “highly unlikely that tether is growing through any organic business process, rather that they are printing in response to market conditions”.

“Tether printing moves the market appreciably,” concluded the report, which compared bitcoin price movements before and after new tether issuance, as well as analysing publicly available tether transaction statistics using forensic accounting techniques.

“48.8 per cent of BTC’s price rise in the period studied occurred in the two-hour periods following the arrival of 91 different tether grants to the Bitfinex wallet,” the report said.

“Bitfinex withdrawal/deposit statistics are unusual and would give rise to further scrutiny in a typical accounting environment. If there is questionable activity, the author believes a 30-80 per cent reduction in BTC price could be forecast.”

Bitfinex has repeatedly promised investors it would produce a full audit of its books to prove it has US dollars on deposit to calm fears, but no audit has taken place.

(Source)

Really no different than what the BoJ does each day in terms of providing key buying power at critical moments, but where the BoJ has an actual printing press it seems increasingly likely that all Bitfinex has is a scam running.

And for anybody still in Ripple (XRP) you are running out of time to get out before it returns from whence it came.  This is a pure bubble chart.

Classic.  Pure.  Bubble.  Every wiggle and jiggle.  

New_Life's picture
New_Life
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Posts: 335
9k and lower? below the 200day EMA?

If it breaks much lower in addition there being little previous volume between 8.5-9k, it will fall below the 200day EMA, something it hasn't crossed since (pls correct me if I'm wrong) ....

 

2015

 

Also Chris, on Tether see 23rd Jan 12noon UTC, $100MM in Tether printed, and the next few hours a sweet rally.

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davefairtex
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Posts: 5462
tether

In effect, Bitfinex has been accused of creating tether out of thin air, without corresponding US dollar deposits, in order to pump up the price of bitcoin.

So let me trot out my favorite expression to use with crypto: "Meet the new boss.  Same as the old boss."  Crypto is going to save us all from those bubbble-blowing unpleasant central bankers.  Thank heaven.

Mark opined a few months back that Tether and Bitfinex could well cause a nasty drop in bitcoin prices.

Everyone loves a bubble.  Unless of course you're a newbie and you buy in at the top.  Then things are substantially less fun.

I suspect a reasonable amount of price movement in bitcoin is engineered - via bitfinex, at a minimum - translated to the other exchanges via arbitrage.  I expect that the arb will break down if Tether goes away.

 

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cmartenson
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Posts: 5752
Cryptocarnage continues

This is a pretty ugly day, as far as these things go. 

Looks like some real damage this week.

Time to repost that suicide hotline?

New_Life's picture
New_Life
Status: Gold Member (Offline)
Joined: Apr 18 2011
Posts: 335
Looking out for others.
cmartenson wrote:

This is a pretty ugly day, as far as these things go. 

Looks like some real damage this week.

Time to repost that suicide hotline?

Sure if you think that will help someone, but I assume you don't mean on here, I'd like to think fellow PP members are smart enough to balance their risks and exposure accordingly.

Do you know if similar measures occurred on the internet to protect people's welfare when silver plunged in 2011 and again in 2013?

Prices could drop a bit further still yet, noticed ETH flashed down to $930 an hour ago, back up above $1000, for now at least, so still up 33% in the last month....

davefairtex's picture
davefairtex
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Posts: 5462
a low?

Looks like a bounce off 8500.  Huge volume spike.  It would be fascinating to know which exchange originated the bounce.

I won't know for a while if this is the real deal or not.  Spike happened in a 15-minute timeframe.  We'll see what it looks like at end of day.

 

 

New_Life's picture
New_Life
Status: Gold Member (Offline)
Joined: Apr 18 2011
Posts: 335
Big Orders at 8500
davefairtex wrote:

Looks like a bounce off 8500.  Huge volume spike.  It would be fascinating to know which exchange originated the bounce.

I won't know for a while if this is the real deal or not.  Spike happened in a 15-minute timeframe.  We'll see what it looks like at end of day.

I was told earlier this eve that there were huge ($5MM+) BTC buy orders stacked at 8500 on GDAX, looks like it worked for some one or some organisation (Tether??), here's what it looked like on the 1m chart off CoinBase, that's one helluva bounce.

 https://www.tradingview.com/x/CoJwrbX2/

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davefairtex
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Posts: 5462
FWIW

The 2h chart (the quickest to update after this event) isn't all that impressed.  Forecaster did move a bit higher (from -1.46 to -1.11) but the downtrend remains firmly in place.

Some experimental "reversal" code I have that tries to predict good entry points wasn't impressed either - it suggests you might want to sell the rally (-47 points on a -100:100 range).

I'm also not seeing clear and convincing evidence that people are piling in behind this move.  Perhaps after some back and forth (i.e. after a re-test of 8500) the picture will change.

 

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timot78
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Joined: Sep 18 2010
Posts: 11
Low @ $8400

According to the chart here:

https://cryptowat.ch/gdax/btcusd

 

the low was @ 8400.

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