Carnage In The Cryptoverse

Adam Taggart
By Adam Taggart on Tue, Jan 16, 2018 - 7:59pm

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...

160 Comments

Rector's picture
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Buying Litecoin

BTFD i guess.  Litecoin is pretty cheap.

Rector

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It's decision time for LTC...

Before this latest tumble LTC was looking like it's coming to a pinch point for a decision on whether it would breakout, had heard rumours it was in talks with Monero.

Meanwhile I woke up and just rebought more ETH in the late 800s after putting some to cash at 1150 a few days ago, will see how that plays out. With all these dips I suspect that big money is the one that buys & gains the most.

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btc update

Well, 8500 didn't hold, but the new low (bitstamp:8314) is looking a bit better.  The experimental reversal code is starting to issue buy signals - that's not the sign that "the low is in" but rather a time to start accumulating.  In major down moves, the experimental code will issue repeated buys as price continues to drop, but it usually makes money once the reversal occurs.  We could still be 1000 points off the actual low, or more.

Price & volume are suggesting the selling pressure is still dominating.

I still suspect the 7500 level will be a higher percentage buy point.

"If you liked bitcoin at $19,000..."

 

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7.5k has volume history
davefairtex wrote:

Well, 8500 didn't hold, but the new low (bitstamp:8314) is looking a bit better.  The experimental reversal code is starting to issue buy signals - that's not the sign that "the low is in" but rather a time to start accumulating.  In major down moves, the experimental code will issue repeated buys as price continues to drop, but it usually makes money once the reversal occurs.  We could still be 1000 points off the actual low, or more.

Price & volume are suggesting the selling pressure is still dominating.

I still suspect the 7500 level will be a higher percentage buy point.

"If you liked bitcoin at $19,000..."

Have to say I never liked BTC @ $19k, was amazed it got that high that quickly.

I'm curious to see how accurate CryptoCred's video was, he suggested the next base of support would be below 8.3k with little previous volume history between 8.5-9k. See prev. video from 12mins in..

Do you publish live charts from BTC or ETH made from your experimental code on a website , they look fascinating.

Oh and it looks like we're still going south, so a real distinctive correction this time, I was also thinking last night anyone that bought BTC in late Dec on credit cards (expecting to be an overnight Millionaire) will have to fund those credit purchases out of January's pay check, could be a lot of quitters right now.

I'm thinking maybe BTC could languish for a few weeks, which IMHO is not a bad thing, would deter FOMO buyers and it would also be good opportunity to get Tether situation out of the picture...

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velocity

I'm still seeing a lot of velocity right now - I don't think the response will be for BTC to just go quiet.  It should bounce pretty strongly off whatever low it makes.  That headfake-low bounced 8% in one 2h bar.

I also don't think the Tether situation will be just "shuffled off stage left without too much fuss."  If and when it blows up, that's probably good for a 30-50% drop.  Nobody likes fraud in their crypto.  :)

"But I was promised a new-new thing, and all I'm getting is fraud, regulators, and a ponzi scheme!"

Paint is still drying on my experimental stuff.  Some versions are way too enthusiastic about suggesting you buy.  Other versions aren't enthusiastic enough.  I'm still tuning it.  Roughly speaking, though, the various versions are giving off the usual "buy the falling knife" signals which is what I trained it to do.

I wanted to see if I could maybe catch the lows rather than waiting for the 20% bounce and then buying.

 

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Crypto Carnage continues

Your ever faithful "bottom nailer" is back here with an update.

That is some really serious damage, again, especially for the late entrants to the game.  I imagine there are a lot of seriously unhappy speculators out there right now sitting on very large losses and wondering what to do.

Sure you can HODL, but there's always the nagging thought that perhaps the bubble has burst and there's only getting out before the tulip bulbs are once again priced at their actual utility and rarity.

That's a tough spot to be in.

 

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Tulips...

Bought more big Tulips, to exchange for mini Tulips, will see how they blossom or wither a year from now...

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that's annoying

The low missed my stink bid by literally $30.  Low at GDAX was $7540, and my bid was at $7511.

I'll take my victory lap though for calling it at 7500.

Volume looks a lot healthier on this low.

 

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Groundhog Day? Literally...

It will be interesting to see how the next few hours go, esp if 6 hours from now we're back at $1000+ ETH.

Would be Groundhog day indeed, it will be remarkable if this is an exact repeat of the 17th Jan, the 4hr chart of ETH is like playing a game spot the difference...

But could still be at least another 6 weeks of winter for Crypto??? ;-)

https://www.usatoday.com/story/news/nation-now/2018/02/02/groundhog-day-...

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Tetherless recovery?

It will be even more surprising if $1000 ETH is reached without any Tether intervention.

That is of course unless the activity on the 31st was prepping for this pulldown?

http://omnichest.info/lookupadd.aspx?address=3MbYQMMmSkC3AgWkj9FMo5LsPTW...

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experimental bottom fisher

Concept behind the training is, it is being asked the question, "given this OHLC bar, will you receive a big gain (or loss) within the next 30 time slices?"  I have it put red/blue balls at the "close" of every bar, with intensity being the size of the gain or loss it projects.

"buy" numbers (higher is better) appear below the bar, while "sell" numbers appear above it.

I can't use this as an automated trading mechanism because the buys and sells aren't matched up, but I do watch it closely when bitcoin has its dramatic sell offs like it did yesterday and today.  I ended up getting in at 8530 (ish) but missed the entry at 8000 because I was...at the gym.  And of course my stink bid at 7511 got missed too.  Note: I didn't take the first entry, because code is too quick to signal a buy during a big downtrend.

 

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1 month trend

I'm more of a "listen to my gut" type guy.  The BTC chart for the entire month shows a nearly linear decline that may be decelerating a little (a strong linear and weak 2nd order parabolic component).  To me it looks like it will continue to go down for a while.  Today's uptick just looks like another hickup in that graph.  Since I moved everything into gold I'm not going to jump back in until the graph looks like it has leveled off.  I'm betting it will get down below $7k before doing so.

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a technical gut

skipr-

I think you have a very technical gut. :)

I also agree that as a long term trader, waiting for the downtrend to go horizontal is definitely the wise thing to do.  That's in keeping with the "replay of 2013" theme that I'm fond of.

I'm just seeing if my insights + AI can get me a quick 10% here and there.  Its really just more for fun.

FWIW I think it could go lower than $7k under certain circumstances.  Let's say Bitfinex/Tether blows up.  That's probably good for a 50% drop right there.  SEC has subpoenaed the bank records of Tether.  That starts the roulette wheel spinning.

The long term (weekly) shows a full retrace (appx 85%, a la 2013) would be back to the 2500-3000 level.

 

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$1000 question....

skipr-

I think you have a very technical gut. :)

Skipr - wise move IMHO, if you have a large stake on the table, preservation of capital is vital.

I think it's impressive ETH is attempting to comeback especially without a Tether intervention.

However if ETH fails to break and stay above 1000 in the next few days I expect it to go south again, the EMA(13,49) on the 1D is the one I'm watching with active interest and I have taken some measures in anticipation...

Also mindful of the bigger picture, look at the 1Yr chart of the Total Chart Cap, looks very familiar...

https://coinmarketcap.com/charts/

ps Dave - you should trademark the EBF, thanks again for continuing to share your insights.

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$900 question...

You get the idea, let's see if I need to follow up with another comment at a lower price in the next few days...

I wanted to add in addition to my thanks to Dave F above, I really appreciate the alternate constructive views being expressed on here, we shouldn't be an echo chamber and it's healthy to have friendly challenges to each other.

Thanks again to Adam for running this and Chris's continued contributions to ensure our thinking on this topic remains rational.

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A fundemental gut

This is a blast to watch. What other asset class has the whiplash like performance? The long-timers have been expecting this and we pull out the popcorn and watch.  Of course this is much easier to do when you bought under $100 (for ether, which is my benchmark crypto digital asset technology). 

Long-timers sold a portion as it went parabolic (defined by me as 4x gain in two months or less). Even the HODLers are tempted to let it do its blow-off top and repurchase when the inevitable steep correction happens. The resettle trend is usually about twice the normal trading range previous to the parabolic move. The normal trading range for Ether was around $300 for the preceding few months.  It might drop lower than that for a short time before settling in.  In this case it might be $600 - $700 for a few months. 

There are a lot of very positive factors that will lead the next parabolic move later in the year. I suspect the next parabolic move might top out about $2,800 before it corrects again...down to about $1200.  And so forth.  Rinse and repeat. 

We discuss this in my forum groups created as a community team to study and research to predict these events. If your interested, see blockchainlead.com.  We are watching the birth of an entirely new asset class. When was the last time that happened?  Once in a millennia?  And you were enormously lucky to be alive to witness it.  An explosive and paradigm-changing world are happening right before your eyes. You have a front row seat if you know what you are looking at and what to watch for.

 

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Great perspective Mark- thanks!
mrees999 wrote:

This is a blast to watch. What other asset class has the whiplash like performance? The long-timers have been expecting this and we pull out the popcorn and watch.  Of course this is much easier to do when you bought under $100 (for ether, which is my benchmark crypto digital asset technology). 

Long-timers sold a portion as it went parabolic (defined by me as 4x gain in two months or less). Even the HODLers are tempted to let it do its blow-off top and repurchase when the inevitable steep correction happens. The resettle trend is usually about twice the normal trading range previous to the parabolic move. The normal trading range for Ether was around $300 for the preceding few months.  It might drop lower than that for a short time before settling in.  In this case it might be $600 - $700 for a few months. 

There are a lot of very positive factors that will lead the next parabolic move later in the year. I suspect the next parabolic move might top out about $2,800 before it corrects again...down to about $1200.  And so forth.  Rinse and repeat. 

We discuss this in my forum groups created as a community team to study and research to predict these events. If your interested, see blockchainlead.com.  We are watching the birth of an entirely new asset class. When was the last time that happened?  Once in a millennia?  And you were enormously lucky to be alive to witness it.  An explosive and paradigm-changing world are happening right before your eyes. You have a front row seat if you know what you are looking at and what to watch for.

Mark - Yep, it's excellent to keep in mind the long term view, I think my mindset towards this is shaped by all of the useful constructive comments on here.  IMHO - You'd be insane to go all in on Crypto when its at fever pitch and you'd be insane to ignore and right it off altogether after a massive correction.  That's why I'm taking a more considered approach to this asset class and looking at all of the influencing factors that shape this space.

One of those factors includes Chris'es excellent new article he posted yesterday on the echoes of 2008, who knows how a stock market crash will effect Crypto, more violent swings down and up?? 

I'm also cognisant of the fact that Wall St have yet to really wash and shake out the little man so that they may take a more advantageous position, this is a good article with background on the Wyckoff theory..

http://business.financialpost.com/investing/the-secret-trading-strategy-from-the-1930s-that-hedge-funders-dont-want-you-to-know-about

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BTC to go under 200 day EMA?

If BTC fails to close above $8800 today (looking v likely) it will have broken the 200day EMA, last time this happened was 2015.

If that does happen, I certainly predict this to be an eventful week. 

As for ETH, I still have my profits from the recent bounce to reengage when it looks attractive again to do so.

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here's some popcorn

So bitcoin has managed to drop to (roughly) 8000-9000 after being hit with the usual "regulators are not happy", Korea jawboning, and China banning bitcoin exchanges, as well as (my guess) a flood of selling by the insiders to dumb money at 19k, then again at 17k, once more at 12k.  Currently, I'm seeing hints of a plateau in google trends bitcoin interest.  "Buy bitcoin" is still moving downhill, while "bitcoin" and "bitcoin price" ticked up slightly.  That's a positive sign, and may indicate that 7500 is a "somewhat durable" low - assuming the uptick in interest continues.

While I agree this is lots of fun to watch (and participate in, if you have a bit of help from an AI - and you don't have a large position), there is a fat lady yet to sing.  That is: Tether and Bitfinex.

I expect if Tether and/or Bitfinex blow up, that will be good for another 50% drop.  Maybe more.  That has yet to happen.  So with due respect for Mark and his price levels, the "Tether risk" is substantial - I could see 3000 without much trouble at all.  Mark - what was the date of the Mt. Gox reveal?  I can provide a chart for that if you can give me the date.

I'm projecting an 85% retrace, for those of you keeping score.  Mark may consider that sort of move grand entertainment worthy of a big box of popcorn, but I suspect he will be the only HODLer finding any amusement whatsoever in the price action.

And all those new bitcoin buyers at 19k?  My goodness.  85% losses.  They'll probably sell the low.

"But I was promised bitcoin $100,000!"  (*)

(*) what we didn't tell you is, it would hit $3,000 first.  And we sold to you at $19k.  HODL!

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BITCOIN crash comparisons.

Dave, the Mt gox. Hack investigation was really interesting by the team that did it. Here's a link to the YouTube speech from the investigators. It turns out that it was hacked several times and was running as a ponzi trying to catch up for years.

It was first announced publicly in March 2013. It took a year to reach the low of around $200 from a mid-day top of around $1100. We have many more serious contenders to fill in the gaps with actual working products now though. Following that path would be a worst case scenario in my opinion. That would put btc low of about $4k with three bitfinex and tether problems. I think a lot of that is built into the price already.

This might be shocking to the newbies to crypto. HODL might seem cliche at this point, but historically it's always worked. Even in the good old days when we sparred over it, the results so far have been unprecedented returns for the patient. Although hindsight is much easier than when we speculated at the time.

To newbies today, I say be patient. New asset classes should be expected to be frought with uncertainty and worry as we cut new trails through uncharted territory. The bitfinex/tether situation will just be one more fascinating chapter in the history books of the future.

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BITCOIN crash comparisons.

Dave, the Mt gox hack investigation was really interesting by the team that did it. Here's a link to the YouTube speech from the investigators. It turns out that it was hacked several times starting in 2011 and was running as a ponzi trying to catch up for years.

It was first announced publicly in March 2013. It took a year to reach the low of around $200 from a mid-day top of around $1100. Today however, we have many more serious contenders to fill in the gaps with actual working products now. Following that path would be a worst case scenario in my opinion. That would put btc low of about $4k with the bitfinex and tether problems. I think a lot of that is built into the price already.

This price speculation might be shocking to the newbies to crypto. The term HODL might seem cliche at this point, but historically it's always worked. Even in the good old days when we sparred over it, the results so far have been unprecedented returns for the patient. Although hindsight is much easier than when we speculated at the time.

To newbies today, I say be patient. New asset classes and paradigms should be expected to be frought with uncertainty and worry as we cut new trails through uncharted territory. The bitfinex/tether situation will just be one more fascinating chapter in the history books of the future. Dollar cost averaging is your friend.

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tether and price impact

Mark-

Very cool talk, thanks.  I have the same problem he did, which was "how to reduce 160 gigabytes of blockchain down to something my program can actually digest."  It took "the blockchain" to make my 32 gb machine look like a machine with not nearly enough memory.

I agreed with much of what you said - except for the part where you opined that the Tether fraud is built into the price already.  Perhaps it is for you, but I suspect, not for the market overall.

 

 

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Well that de-Escalated quicky

Makes you wonder just how cheap do Wall St want to buy ETH?

Thanks again to the diverse thoughts and ideas being expressed on here, to be more informed with useful opinions helps to make better choices.  

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buys - then sells

So my experimental chart gave off medium-to-strong buy signals before price broke 8000.  After it dropped below 8000, code started getting more upset, with the most recent signal being quite strong (-99).

There was a medium-grade buy at 7500 on another version of this chart which I actually executed on.  A bit too early, sadly.  I was saved from the 8000-8500 entry points because my blockchain got corrupted yesterday and I had to spend half a day rebuilding it, but its all better now.

I'll be interested to see what the latest bounce looks like once the current 2h bar is finished.

What do I have to do when i take a victory lap at 7500 but it turns out I'm premature?  Drive backwards??  :)

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btc 6330: a buy signal

From the falling-knife-catching experimental reversal detector:

A buy signal at 6330, which suggests its possibly time to start acquiring.  Of course, that doesn't mean "the dead low is here" - just that the detector is saying, it is probable that bitcoin will be higher than it is now within the next 48 hours.  And the signal of "94" is fairly strong; that hasn't been seen since the bounce off 8000.

Note too that it has been wrong before, on the down-slope after the bounce @ 8000.  I trust it more when it triggers after hitting new lows.  Reading the tea leaves, round number 6000 is probably the low.  Well - the current low anyway.

I remember Mark lamenting - at 19k - how most people would never be able to afford one full bitcoin.  Well...if you could afford 1 bitcoin @ 19k, here's your chance - you can get 3 bitcoins!  How cool is that!  Take out that credit card and ... oh wait.  You can't do that anymore.

Note that the buy signals from the reversal detector usually come in bunches, so we might go even lower still, but I'd expect to see the code generate more buy signals from now on if lows get made.

Not financial advice, etc.

 

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That Jives with me

I've predicted we would see close to a 70% drop from the high. That would put it at about $6,000 from a high of $20k. So, my internal 'spidy-sense' agrees.  Really glad I took some profit this time. Whew.

 

 

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Markets are taking us to school

Dave, you and I have wondered for some time what would happen in the crypto-verse if the markets took a big tank. I wasn’t sure.  They can be seen as a safe haven during political crisis and monetary crisis in other countries. This is the first major stock market correction I can think of since crypto became ‘a thing’. I think you were clearer in expecting both would trade down significantly.

I would imagine margin calls would pry a lot of asset prices loose as people scramble for cash to meet margins. Can you think of any other associated correlations?  Could it be timing as crypto markets started down first and then didn’t slow down as the stock market started correcting?

Could both be the mothers of both bubbles spell double trouble? (Say that five times as fast as you can).

 

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what is bitcoin?

Mark-

Definitely the cryptos are too new to say anything about them for certain, in relation to how they correlate with other assets.  Are they a risk asset?  Or a haven asset?

Well if your currency is dying, as in Venezuela, then bitcoin is an escape hatch, although a 60% drop over 2 months isn't what I'd call a safe haven.  As a mechanism of fleeing your lame, dead currency, temporarily putting your cash in bitcoin while you flee is just great.

With the benefit of hindsight, it appears that bitcoin's rise to 19k was the result of a huge impulse of dumb money, plus (my guess) the injection of Tether ponzi money, plus some pretty strong manipulation by the whale-insiders.  With dumb money stepping back, and some number of whales having taken profits while professing to HODL, my guess is that bitcoin will do well to hold here at $6000.  I do think it is oversold, and is probably ready for a more serious bounce.  Certainly the exchange volume numbers suggest this, even if the bitcoin metadata TX counts do not.

If the whales decide to rotate back in - certainly dumb money won't be buyers here - then we could see a nice rally until another shoe drops.  I'll call that shoe "Tether" but it could be anything.  There are probably a whole lot of trapped dumb-money dip-buyer longs at 10k who would love to "get out if they got back to even" and never look at anything crypto ever again.  (At least until it hits $38k, of course).

Of course all of this is just a guess.

Sorry if this comes across as being negative, but I'm seeing diminishing interest in bitcoin in the longer term bitcoin metadata I follow. Unless that changes, I think that will lead to lower prices ahead.

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How low and for how long?

I'm inclined to agree with Dave's outlook, however these assets are not static and they are being developed and that is likely to change their future attractiveness.

The difficult part to ascertain is how much of these future developments and promises have already been priced in and over speculated?

My tracking of ETH on the 1d is still definitely down, with the obvious nice bumps up to entice those who think its the rebound, they can be profitable if you can time and trust them. 

The CFTC/SEC Senate Banking hearing today could be mildly positive, will watch the outcome and its effects on prices.

Will be interesting to track both ETH and BTC at the start of each month for the rest of this year, my gut feeling is that when Spring comes there will be a renewed interest in ETH and that will be from businesses.

One characteristics of a bubble bursting for good is that it never reaches its previous peak within a reasonable timeframe.

So we'll wait and see if ETH & BTC become like Silver and Gold?

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"renewed interest'

New_Life-

One of the mantras in TA is that 'interest' ends up showing up in the price/volume data - because the really clever people (like Mark) who are plugged in end up figuring out what is about to go down, and buy in advance of that event - long before the rumor becomes news.   And the footprints of their buying ends up being visible, if you know what to look for.

Right now, the "overall interest" in bitcoin is declining; this suggests that a near-term exciting catalyst isn't on deck.  I don't have a similar amount of granular data for ETH, so I can't comment - other than to say the ratio continues to outperform, and that the ratio seems to be showing a potentially interesting downspike (a kind of temporary low) which generally goes along with ETH reversals. (I.e. its a buy signal).

Being an ETH-follower, I suspect you know what I'm talking about, but I'll toss up a chart just in case.  Its overly complicated, but the concept is - peaks in ETH/BTC are sell signals, and valleys in ETH/BTC are buy signals.  Right now - we're at one of those valleys...

FWIW I now have a small ETH position, having talked myself into buying...

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btc update

Here's the latest 4h chart.  It's a buy.  My trend-following code is a bit laggy with bitcoin on the bounces, but its decent at selling the tops.  Reversal code got me in at about 6300.  (Of course, it also got me in at 7500, but that's before I figured out not to listen to it unless it made new lows first).

See the big bunch of volume bars on the most recent reversal?  That suggests its a more durable low, vs the much smaller bar-collections the last few times it tried to reverse and failed.

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New_Life
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Staggering, but is it sustainable?
davefairtex wrote:

Here's the latest 4h chart.  It's a buy.  My trend-following code is a bit laggy with bitcoin on the bounces, but its decent at selling the tops.  Reversal code got me in at about 6300.  (Of course, it also got me in at 7500, but that's before I figured out not to listen to it unless it made new lows first).

See the big bunch of volume bars on the most recent reversal?  That suggests its a more durable low, vs the much smaller bar-collections the last few times it tried to reverse and failed.

 

I'd be happy to lurk at 7.5k for a month to go upto $8k build a solid support base for the rest of the year.

Same for ETH $730- $770 to climb to $1000+ again.

February could be a long month the 1d day trend for ETH is still down..... 

Amazing if that reverses.

Especially so without Tether intervention and after losing some of the overstretched indebted reckless noobs.

This is real volatility, maybe Wall St are playing us aswell......

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New_Life
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Crypto Bubble Comparisons

Here's 2 charts showing different six month periods for Crypto Total Market Cap

2013 shows 16x increase to its peak of $16B, the month after it fell to $8B then gradually started to rise again.

2017 shows a 8x increase to its peak of $800B

Yes I'm cherry picking the dates to fit the similar shape of ascent/descent.  The difference with the latter is that more "dumb" money was included and there is a lot more scams and dubious worthless coins out there.

Today's value is $360B, so relatively its lower than what happened in early 2014.  However, the real question is will it just continue to drain & bleed away or will it surprise many, start to gradually climb to the Spring and go higher still in the summer as the market matures and institutional buying picks up, maybe even go over its peak of $800B later this year?

Thoughts, comments?

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New_Life
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$800 Question?

Missed ETH passing $800 it one the way down, oh and $700 and $600...

Thought I'd catch it the second time...

Next few days may give us a clearer picture, ie will this downtrend even out just below here at a level of previous support ($730-770) or start to drop away again.

DaveF if your reading currently, you might want to see CryptoCred review of BTC on the daily (London) close.

He's all about the reviewing daily timeframes, he goes live 00:00 UTC

Interesting guy to listen to, studying in London, v English accent but actually from Moscow.

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davefairtex
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btc update: mixed messages

Here are what my two approaches are saying:

The reversal code is saying "sell the high", while the trend-following code is saying "trend remains up."  But even with the trend code, the momentum seems to be slowing.

Here is what I mean: see how the forecaster used to be up at 2, and now its at 1?  That says the slope of the uptrend is dropping - even though the trend remains up.  The 4h forecaster is usually the most accurate.

Now here's the reversal detector.  I've been working on making it more accurate. I have 3 timeframes: 16, 24, and 30 representing the # of candles it is projecting forward.  Question it asks is, "will I make a 'good return' in the next N candles.'  The 16 is wrong sometimes - its a bit too short term, and sometimes it will have you buying when you shouldn't - though you do get more actionable buy signals that do work out.  30 is a bit pessimistic.  It only says buy when it really means it, which means sometimes you miss out.  24 is in the middle...and so that's what I'm showing you.

FWIW, this code only works well during conditions of relatively high volatility (i.e. 20% price moves over a couple of days).  It won't give any signals when things are more calm.  Note the lack of signals in the first part of the chart.  For that period, we can use the trend-following code.  The reversal code is only used when things get a bit crazy, and you want to figure out when to BTFD right at the lows instead of waiting for the trend code which can be laggy.  I don't like missing out on that first 15%, and that's why I wrote the knife-catching-reversal code.

Another FWIW: I'm back to flat again.  Best gains were from my ETH buy: 585-768.  Better than a poke in the eye anyway.

And one more thing: google trends "buy bitcoin" and "bitcoin price" are starting to move a bit higher.  Dumb money might be starting to get interested again.

So - that's why I say "mixed messages".  Except I'm being conservative since I believe there are still shoes to drop in the crypto space from the Empire Striking Back.

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New_Life
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Waiting....

Overall view of ETH looks like a slinky spring ready for one more step down this staircase.

Ready to pounce for the bounce (if I am awake)

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New_Life
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ETH trying to breakout, esp if it cracks $860

And I'm still waiting, its been an awesome fight crawling back up from $570

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New_Life
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Close call... now waiting for approx $700

Ten hours later after a progressive ride upto $880, its currently now $860, I'm now expecting it'll retrace in the next 24 hours.

If I see another uptrend (maybe around  $650 ~ $700), then I'll buy and see how that goes over the next week or so.

 

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davefairtex
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BTC: 3 perspectives

First, here's the 4h forecaster.  Its bearish.  Right now at least, 9000 appears to be resistance.

The 2h 24-time-unit BTC reversal model.  This was trained on data dating back to the 2013-14 bitcoin crash, so it has seen trouble before.  It's showing a low-probability buy right now.  It is also sometimes wrong about single spikes down as buying opportunities, but when you see a cluster of buys, it is usually correct.  I like this one best.  If we see another few buys - in the 80-90 rating - it might be worthwhile taking the risk.

Now here's the even-more-experimental 4h ETH reversal model.  It has only ever seen bad news once, so it tends to be a bit more optimistic.  Its signaling a medium-probability buy.  I think it is probably too enthusiastic.

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davefairtex
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medium buy signal: ETH

I'm still adding indicators - I dug one up that nobody uses that seems pretty decent for reversal detection.  After adding it to ETH, I saw - well a bit more enthusiasm than I'd like, but it provided some new buy signals in the past few bars that might be useful.

I'm really not entirely confident with ETH because it just hasn't gone through enough market cycles to teach the AI how to read the bounces.  Still - I'd rather have it than not.  Better than a poke in the eye.

My whole goal is to get it to tell me when to buy those scary red candles, and it does seem to do that pretty well.  Note that over 50% of the buy signals are varyingly-sized red candles.  And most of them work out!  In spite of what I just said - I didn't train it explicitly to select only red candles.  It did that all on its own.

 

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mrees999
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The market crash reasons?

Could it be this medium post with evidence of the Bitfinex and Tether smoking guns?

This was released on Feb 7 - looking at the timing of the charts from Dave. Coincidence?

 

https://medium.com/@bitfinexed/the-audio-recordings-bitfinex-doesnt-want-you-to-hear-44d677cf1094

 

Crypto markets are going up but nothing has been resolved. There may be some good 'blood on the street' moments sometime in the future.

 

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davefairtex
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the future

I agree that there seems to be several shoes yet to drop on the whole Bitfinex situation.  I listened to the recordings and it doesn't sound confidence-inspiring.

Meanwhile, I notice that fee volumes are hovering around the same place they were back in September 2017, and tx counts are down dramatically.  In the past, price has tended to follow TX counts, although its not a perfect relationship.  If TX counts continue to fall, I think price will eventually follow.

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davefairtex
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buy

All my shorter-term trend followers have tripped "buy" about 6-12 hours ago.  The break above 9000 resistance looks bullish.  I suspect 10k will be the real test.  So far the reversal code isn't showing too much selling pressure.

I'll post a chart tomorrow.

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davefairtex
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rising fees

I'm also seeing rising bitcoin fees.  Looks like something got the animal spirits back again for crypto.

 

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davefairtex
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4h forecast

Pretty strong buy signal yesterday, and the trend remains intact as we approach 10k.  The reversal code isn't showing any serious selling pressure at the moment, so for now at least it looks to be all clear.

Anyone out there know how to extract Tether transactions from the bitcoin blockchain?

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New_Life
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Tethers

Dave

This parody account is where I go to check for Tether activity...
https://twitter.com/tetherprinter/status/963792244464435200

There's Euro Tethers and also on the ETH blockchain as ERC20 tokens..

I watched BTC shift horizontally out of its latest descending channel and then pop up out of the ascending triangle, still can't quite believe it did it without another revisit lower.

Key support/resistance for BTC is at 9.3k & 10.7k

I bought the breakout as it happened, not sure how long we will hold could end up testing either sides of 9.3k for a bit would be incredible if a steady climb continues. But watching for signs of a pullback, could easily go south again esp. if people who bought above $10k are getting out while they can.

In addition to new developments and progress, as Chris & Adam point out sentiment drives these markets. Chinese New Year holiday is almost over (observed by many countries), let's see what happens over the wknd into next week.

Thanks again for your contributions, may I enquire on the extra indicator you're tracking for ETH bottom fishing?

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New_Life
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Battle for 10k underway....

There's also some previous support/resistance around 9.8k so a contest at this level could run for a while.

I have however been monitoring the RSI (which can stay v high for a while on a BTC bull run), I'll be looking for a series of higher highs in price and lower highs in RSI, esp when it drops back down to under 70% on multiple timeframes with decreasing volume.  I have also been noticing an increase in short positions and decrease in longs.

Dave you may like this updated view from CryptoCred on horizontal support/resistance levels.  He only has a small position in BTC, he's does however have a strong academic interest in charting it. 

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davefairtex
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more tether

I have the full blockchain, but I don't know how to identify the tether TX.  If I could do this, it might be really decisive in detecting the influence of Tether on price.  Of course I should not talk too much in detail or else they'll start spending more effort to obfuscate what they do.  This could be the holy grail though.  (I'm always looking for that information-blockchain holy grail).

I suppose I have to grunge through the protocol docs to figure out how to do this.  I was hoping to use someone else's code.  Still, thanks to your links at least I can now find the protocol docs, so that's a plus.

Here's the recent 4h ETH chart.  No warning signs yet.  A hint of a buy (a "17") on the most recent red bar. 

What I don't like is that the ETH/BTC ratio is falling rather than rising. The rough descending triangle on the ratio doesn't look great.  Based on this, I'd pick BTC rather than ETH to trade at the moment.

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