Crypto capitulation is here

mrees999
By mrees999 on Wed, Mar 21, 2018 - 1:44am

Regarding the crazy crypto market. I sense he now have capitulation. Or course most of the market is scams and swampland with hucksters.  But... Next to those landmines are goldmines if you know where to look.  If you don't you need a guide. 

Many of have made 1000x, not because of luck. It invovles hard work. But - where else have you hand chance for 1000x returns which are super rare.

Follow me and you might go places.

See you in May and the Peak Prosperity sponsored event. It will be great to meet some of you in person!

Mark (the Moracle)

 

 

36 Comments

New_Life's picture
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Capitulation will be later and lower...?

I think there's a possibility capitulation is a lot less than where the market is currently.

If this follows the patterns of most bubbles it breaks below the long term upward trendline before a future upturn.

BTC testing 8k, if 7.6k breaks in the next week, April could be seriously ugly.

Prices in May could be 40% lower than early March.

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what is capitulation?

Normally capitulation comes with a fair amount of volume attached.  What I see on the daily chart isn't capitulation, its just the right side of a bubble pop which has yet to fully resolve.  Lower highs, lower lows, downtrend remains intact.

ETH/BTC ratio also just continues to drift lower.  Currently its at 0.0566.  That's pretty unpleasant.  If it continues to drop slowly, that should drag ETH right through 400...we know about round numbers.  If on the other hand the ratio stops dropping, that could be a buy signal.

Key word here is drift.  There is no panic, just a drift lower.

Google trends continues to show decreased interest in both bitcoin and ethereum.

I think a "true" capitulation could happen if/when USDT blows up.  That would cause a big panic out of the space, the thundering herd would stampede into cash, bitcoin probably drops another 50%, and it is accompanied by articles that says "bitcoin is dead."

We need the popular press to be confident enough to pronounce bitcoin dead, and to make fun of everyone who ever bought such a stupid thing.   Kind of like the reverse of your "skeleton" post.

That's what I'm looking for in a capitulation.

 

 

 

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ETH volume support

Drift is a kinder way to say it feels like the price is bleeding away.

For ETH I feel low $300's could still well be in play in the next few weeks, we are almost below the $400 support, plenty of Volume History at $300-$320 nowhere near as much in between...

But is the Wyckoff method at play here, get the public to sell ready for institutional buying?

 

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Drifting lower...

I don't follow these daily price moves in cryptos nearly as closely as many here, but to add my $0.02 this looks and feels like a classic bubble bursting in "leaky" fashion.

The drift lower is very real, interest seems to be waning, I don't hear people talking about this anymore in my circles with the same excitement (or at all, really), I haven't been asked about cryptos by anybody I know in the past month, and Google searches are still way down.

This chart looks like BTC is at a critical H&S point.

I agree with Dave.  Capitulation comes with headlines and cover stories declaring cryptos as being dead.

 

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Change the Time Axis

I think if one changed the time axis to 1718 to 1721, it would bear a strong similarity to that other famous chart regarding South Sea Stock and a really smart (or "smart") fellow (which has been mentioned here a few times).  But this is the modern era; most likely things will be different this time.

For practitioners of Schadenfreude, seeing high-profile investors losing their shirts is always amusing.

But for the true connoisseur, the finest expression of the art comes when a high-profile investor identifies a bubble, perhaps even makes money out of it, exits in time – and then gets sucked back in only to lose everything in the resultant bust.

source

 

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New_Life wrote: I think
New_Life wrote:

I think there's a possibility capitulation is a lot less than where the market is currently...

...Prices in May could be 40% lower than early March.

I hope so. I’m trying to accumulate as much cash in Coinbase as possible for that entry!

New_Life's picture
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Pin the Tail on the Donkey

Thanks again to all who constructively contribute on here, we should be considering all options.

For the moment I completely agree with Chris and Dave

So here's my guesstimate as we enter May... 

Not sure why I've coloured my projection for BitCoin in green because given its direction, its hardly appropriate...

 

For those interested in such things there was a lovely example of a hidden bearish divergence between 11th & 20th March on the daily timeframe using standard RSI, as you can see the price reacted perfectly afterwards.  Price also seems to have been respecting my two downtrend lines (Amber and Red) I expect we'll get a short lived bounce off the blue long term uptrend before things get really nasty.

Let me be clear I hope I am wrong,  Would love nothing more than a bull market to explode for me to ride for the rest of the year, but right now I feel this spring/summer could actually be a winter for BitCoin & co.

oh and again I think the 50/200 MA Death Cross is confirmed this weekend....

New_Life's picture
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Buying bargain prices...
Tycer wrote:
New_Life wrote:

I think there's a possibility capitulation is a lot less than where the market is currently...

...Prices in May could be 40% lower than early March.

I hope so. I’m trying to accumulate as much cash in Coinbase as possible for that entry!

If happens you may have a few months to Dollar cost average at the lows....

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holding out (not)

I hope so too.  I kept holding off, thinking the bottom was near.  After reading today's posts I'm finally trading the rest of my BTCs for gold and silver.  Instead of a 20x profit last December I now have 10x.  I still can't cry.  OK, maybe a little.

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skipr - could be worse....

Mark will like this one... a BMW for $8MM?  :-O

https://thenewresearchgroup.com/market-updates-rumors/readers-story-i-bo...

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Re: Holding Out (Not)
skipr wrote:

I hope so too.  I kept holding off, thinking the bottom was near.  After reading today's posts I'm finally trading the rest of my BTCs for gold and silver.  Instead of a 20x profit last December I now have 10x.  I still can't cry.  OK, maybe a little.

Congrats on a 10x gain!  That's awesome, and I mean that.

FWIW, I still think there's a very ugly shoe to drop when the Tether scam is exposed.  Hopefully 'they' (at Bitfinex) were simply using Tether issues to buy BTC from themselves (in a wash-style interaccount trade)  which only sent bad price and volume signals to the rest of the market.  

At worst people accepted tethers in lieu of cash for their BTC.  They are just hosed 100%.

Somewhere in between would be people who bought BTC from the Bitfinex scammers after the price spikes (this is most likely and best way to run this scam, as far as I am concerned...it works at all price levels...buy BTC at $X, issue $100M Tether, buy BTC from yourself, drive price up a few hundred bucks, and as a last step sell BTC to the newly interested buyers who are excited by the price spike).

Those losses are very real, but not in the realm of 100%, just for the amount of the scammed price hike until the new acquirers realized their error and bailed.

I could be wrong, but that's where I am (heavily) leaning.  The Tether wipe out will be the real capitulation event.  It will be ugly.  Knowing which cryptos to buy in that wipe out will be the trick.

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something backed cryptos

I'll have to get up to speed on what's going on with Tether.  I never understood the supposed advantages of dollar, gold, silver, etc backed cryptos.  Tom Cloud at SRSrocco REPORT loves the metals based ones.  Just buy the gold etc with BTC and vice versa at the various exchanges.  Am I missing something?

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Crypto Carnage continues

Sad to say for the crypto holders, but the carnage continues as I am writing this on Thursday evening at around 9:00 p.m. Eastern Time on 3/29/18.

Bitcoin is below $7k while Ethereum is below $400  

Of course, in the past I have proven to be especially adept at posting the exact bottom for a move, so take this with a grain of salt.

I just note when I see a noteworthy move and post it.

At any rate, all the technical indicators I have been tracking are pretty much busted now so...these could go a lot lower now too.

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Bi-polar Asset class

There is no doubt that this is an irrational asset class being as new as it is. 

This is marked by manias and depressions.  

FOMO "Fear of Missing Out," is quickly replaced by "WATE" - World is About To End!

I advise my followers to EXPECT a 70% drop from tops each year. The current drop fits that mold.  But we can ask ourselves "what are the fundamental reasons for this?"  What changed?

I'll speak to Ether as that is the crypto I most closely follow.  In 2016, just out of the gate and not even a year old - the promising new coin that would usher in the new world of "Smart Contracts" using GEN 2 of the blockchain protocols. One of the blue sky ideas was the concept of a Decentralized Autonomous Organization.  A smart contract that could function as if it were a company. The very first beta version was celebrated with great fanfare, and it rose on the explosion of price in Ether from less than a dollar to $20 - for a 20x increase. 

The first infant from this new experiment failed. Not surprising in hindsight for doing this all on untested paradigm-bending ideas on the newly created operating system and programming language. Programmers were cocky claiming 'code is law' and 'unstoppable programs'. You could sense the references to the 'unsinkable Titanic' moment was in store.  

The first DAO *called "THE DAO" was hacked and $50 million worth of ETH was drained. Although it was later restored with a code-hard fork, the money was returned, but it split the community. The price dropped by half back to $10.00.

Then, even worse - the network continued to be hacked for months afterward spawning empty wallets that in-effect spammed the network that the processors (miners) had to process. The action effectively bogged the blockchain down so that only a dangerously low amount of processors could keep up. This went on for months. It was an essential struggle, and the price dropped further into the $6 range. 

At this point, there was the real reason for a feeling of doom.  Before that,  - in the Bitcoin world the most prominent exchange in the world that handled over 70% of all bitcoin transactions was hacked, and went down. This might have been the end of that generation of bitcoin  - in theory. But blockchains are notoriously resilient.  Bitcoin itself would have been rebooted with some modifications and would chug away again but with some less confidence from the outside world for some time. 

Those are two examples where it made sense for the price to drop massively. These were existential threats to those networks \ protocols \ currency systems. 

Compare that to today.  What have we got that provides an existential threat? The fundamentals are great. There is a mass of working going on by tens of thousands of programmers. They are solving real problems. Some of our most prominent technology companies in the world are lining up behind them as the new way forward. 

It sounds cliche at this point to say "HODL" through it, and 'It's on Sale!", But it's true. There are benefits to the slow times where the 'pumpers' and scammers go back under their rocks again. The real innovation happens when the people behind the scenes have time actually to be productive as they change the world.  

There are far too many protocols to comment on or track; I can say the developments in Ethereum coming online this year might be remarkable. 

So, I feel bad for those that purchased these high prices and didn't understand what they were buying. I sense many of these same people are panic selling now and taking significant losses. The old-timers bought much cheaper and are still holding onto massive profits. They've been through all this before but much, much worse. The current slide is a walk in the park in comparison, and they are likely on shopping sprees - picking and choosing the exciting projects with the brightest future. 

Smart people are moving in. People with little expertise are fleeing. Wealth Transfer is happening again between the patient and the impatient. This shows still why education is critical to understanding this new asset class. The tears work both ways in a bi-polar market as they become horrified to learn they sold at lows when new high-water marks get set as per the repeated pattern.

It might be wise to withhold the 'I told you so" as we continue to sail the uncharted seas of the new paradigm.

 

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Carnage = Capitulation

Can we save the Carnage term until we really bottom out? :-)

Trying to accurately forecast any bust is hard, harder still with whale manipulation, wash trading, painting the tape and Tether fuelled mini rallies offering false hopium.

Odd observations for the day, Binance exchange just posted a recent bottom of $6666.66 for BTC.

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eth: trying to form a low

My reversal code says ETH is trying to form a low at around 370-390.  I'd feel more comfy if bitcoin was also trying to form a low, but that's not happening.

My guess: thing that's driving my code to say "buy" is the ETH/BTC ratio, which bottomed out at 0.0540 and is now moving sideways-to-up.  For now at least.    If money continues to flow from BTC to ETH, BTC could crater further while ETH avoids a larger breakdown.

Code isn't perfect.  See the "oops" section.  That's why this is not financial advice, etc.  :)

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ETH price dynamics to consider

Pretty sure ETH is being dumped heavily for fiat by loads of ICOs that need to secure cash to run their projects, I believe EOS did that recently

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Kinesis

Does anyone have an opinion on a cryptocurrency discussed on USAWatchdog https://usawatchdog.com/jig-is-up-for-the-dollar-andrew-maguire/ Kinesis https://www.kinesis.money/documents/kinesis-blueprint.pdf that seems to aim to make an alternative (gold-backed) monetary system.

Still reading up on it, an initial question (and possibly interesting information for some here).

 

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eth: sell

There's really no doubt about the sell signal for ETH.  Which I followed.

Nickels in front of the steamroller.

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kinesis

I was going to do a writeup on kinesis...lets see if I can dig it up...

... their business plan looks a lot like something I laid out a few weeks ago, in that it is designed to be a USDT replacement, but fully backed by gold. They have an interesting new wrinkle: they'd be charging transaction fees of various kinds for the currency's normal use, and they are promising a revenue share of the fees with anyone who contributed their gold to construct the currency. It has a lot of moving parts, but at the end of the day, the impact could be a whole lot of money flowing into the physical gold market.

I can't say if the business plan holds together - I haven't run the numbers, nor do I have a sense if people would use the currency enough to generate all those fees they talk about - but if depositors can really get yield by contributing gold (think: “authorized participants” as per GLD) to create new units of a fully gold-backed crypto currency, with the yield paid by transaction fees (think: “interchange fees” from gold-backed debit card usage, as well as ATM fees for withdrawals, which are shared between company and gold-depositor), some really serious money from the crypto space could appear that is looking for both safety and yield.

If the crypto market survives, and enough crypto-players adopt it, Kinesis is the very first thing I've ever seen that has a chance of causing the eventual (and often-promised) COMEX default. The currency won't go live until later this year, and the initial volumes aren't large enough to cause a default all on its own at first (USDT = $2.6 billion, vs GLD = $27 billion); the default only happens if the currency really takes off.

But unlike bitcoin, Kinesis could be used to buy coffee, via that debit card link to a crypto-saver's Kinesis coins. That's not different from many bullion storage places which also offer this service, but the fun new addition is the built-in demand from the crypto universe for a stable "cash" deposit currency outside the banking system for places like binance which don't have standard banking connections.

Will the banking system allow Kinesis to make use of the debit card/ATM network?  If not, then the fees don't appear, and there is no incentive by gold depositors to participate.

It requires a deeper dive than I did to sort out where the risks are.  The promise, though, is that Kinesis could be an actual gold-backed currency, independent of the banking system, that taps into the "safe haven" demand of the quarter-trillion-dollar crypto space.  Effectively, gold will be the "safe haven" for crypto; the larger crypto gets, the more money would flow into Kinesis, and that would result in more money flowing into physical gold, since Kinesis is fully reserved.

At some point, if crypto got big enough, and Kinesis became the crypto safe haven deposit currency, the physical gold demand from Kinesis/crypto depositors could end up exhausting the readily available physical supplies of gold.

Or so the theory goes anyway.

It would be interesting to see how the gang in charge reacts to this possibility.

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BTC back at 6.6k

Third time in a few days

IMHO this is NOT a triple bottom

I'm betting we see under $6k in the next week, maybe even $4k+ in the next 2 weeks

And so yes, the longer term $300 support for ETH could seriously be tested...

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E-Coin???

Did anyone hear about this?

http://cassandralegacy.blogspot.com/2018/04/italy-abandons-euro-first-co...

First it was India, and now it's Italy.  How is it going for the Indians?  I bet there will be a flood of new centralized coins coming online soon.  If you add to that Wall Street's futures, has the decentralized cryptos been defanged?

It's really interesting Italy is calling their centralized crypto "E-Coin."  That's what the evil corporate giant in the cable show Mr Robot is calling their centralized coin.

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april

E-Coin & Italy: it's april 1, right? :)

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April 1 E-coin

I hope it's a joke.  Then again the author is a professor at a university in Florence and a member of the Club of Rome.  He didn't show much of a sense of humor in his book The Seneca Effect.

http://thesenecatrap.blogspot.com

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Kinesis

Dave, thanks for the sharing your thoughts. It sounds potentially interesting from a helicopter view, but going through their blueprint I have to admit that I didn't really 'get' the way they are supposed to operate, how they generate revenue, and how the links are to metal and to fiat, and how this all hangs together with a crypto-asset. I know little of financial/ economic systems and the way they operate, so it probably hangs together with that. While with most (not all) of the white papers on crypto-assets I did get the way their business is supposed to generate resources, I didn't here, as you say, there seem to be a lot of moving parts, and quite some assumptions that need to materialise for this to work... There also seem to be risks involved for a system that actively undermines the status quo (and that is vocal about it).

Some more work to do before taking a decision...

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April's fool? watch the bouncing crypto!

Going to be an interesting year!

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When will this bear market end?

Courtesy of commodities trader (an OG), Peter Brandt..

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Hello 6.6k back again so soon?
New_Life wrote:

Third time in a few days IMHO this is NOT a triple bottom I'm betting we see under $6k in the next week, maybe even $4k+ in the next 2 weeks And so yes, the longer term $300 support for ETH could seriously be tested...

Nice manipulated Dead Cat Bounce to squeeze out all the shorts on April Fool's Day (ratio of longs to shorts was the lowest it's been for weeks). Price spiked 450pts in 12mins,  Simply Savage.

So we're back bouncing off 6.6k area again...  We may try go to linger up in the low 7xxx's for a few days but still expecting lower from here..

 

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Article on Thether

One of the probable coming bumps in the road: https://btcmanager.com/summary-on-tether-and-where-were-at/

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$5k??

I have a gut level feeling that BTC will bottom out at around $5k.  I'm waiting for that to happen before I start getting back into the game.  It could go even lower.

PS:  If gut level intelligence is proportional to size, it's a genius and I need more exercise. :-)

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Futures below 5k?
skipr wrote:

I have a gut level feeling that BTC will bottom out at around $5k.  I'm waiting for that to happen before I start getting back into the game.  It could go even lower.

PS:  If gut level intelligence is proportional to size, it's a genius and I need more exercise. :-)

Glad to see you stayed on the sidelines following my earlier "Choppy waters" comment.

I have sneaking suspicion that price could be kept range bound for the summer/autumn between 3k & 6k and then whipped about a fair bit between them. If you like I'll let you know when I see things looking calmer.  That said I hope to swing trade if that scenario happens.

John Bollinger (yes the JB of the Technical Analysis Bollinger Bands) posted today that 3 Month BTC futures as low as 4755 had been set. If that happens, anyone that bought above $10k recently and hangs on for the rest of the year has immense fortitude and certainly qualifies as a HODLer.

https://twitter.com/bbands/status/979495853055467520

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Capitulation... are we there yet?
New_Life wrote:
New_Life wrote:

Third time in a few days IMHO this is NOT a triple bottom I'm betting we see under $6k in the next week, maybe even $4k+ in the next 2 weeks And so yes, the longer term $300 support for ETH could seriously be tested...

Nice manipulated Dead Cat Bounce to squeeze out all the shorts on April Fool's Day (ratio of longs to shorts was the lowest it's been for weeks). Price spiked 450pts in 12mins,  Simply Savage.

So we're back bouncing off 6.6k area again...  We may try go to linger up in the low 7xxx's for a few days but still expecting lower from here..

Capitulation...?

This certainly doesn't feel like it.

Back yet again hovering above 6.6k after a visit to low 7k.  How many times can we revisit the horizontal support of 6.6k and keep bouncing off it?  The 12hr showed a nice hidden bearish divergence between 3rd & 8th April, a failed mini rally which brought us back down from low 7k's to here.

The daily chart is still showing a standard bullish divergence on RSI and OBV, its a trend that started on the 30th March, but I'd be surprised if price takes off and explodes upwards, unless of course our favourite actor creates some fake money to artificially ​buy BTC.

Meanwhile other whale and exchange manipulation has been rife, pumps and dumps almost every other day.  One other thing to note is the ratio of Longs / Shorts is the lowest its been since November... ie more people favour Shorts.  That has led some to be caught out by squeezes that reset the indicators and hit their stops.

If you're reading Dave, I found this useful for aggregating volume across many exchanges, probably worth keeping an eye on it for when we really see capitulation, I agree with you that I'd expect far greater volume than this for witnessing the bottom of BTC...

https://data.bitcoinity.org/markets/volume/6m?c=e&r=day&t=b

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capitulation

One other possibility for capitulation - beside a big high volume denouement - is that people just stop caring, and price chops sideways at low volume for a while.

But the "emotional" capitulation is all about people not wanting to touch bitcoin anymore.  "Boy was that a stupid idea."  I'm just not sure they've had enough time for that to occur.

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Fundementally...

There are a few reasons the sentiment tide could be turning.

 

Taxes were a huge deal. A lot of people made a lot of money come January 1.  People for the year were up over 1000% gain. Taxes might be 40% (short term) for a lot of that money forcing people to sell, even at depressed prices. If like me - they wait until the last minute hoping it will recover and they won't have to depart with their precious coin that will reinflate. 

 

Then we have the news of George Soros fund starting to make a lot of crypto plays. I'm sure they have for a while, but why pick now to announce it? And the Rockefeller Foundation. Again, the timing of announcements isn't just by chance, there is something to be gained by it.  Three little nods together to boost a little confidence.  Let's see if that moves the needle.

Not that I'm complaining. It is only by looking back when you palm your head and realized you should have bought when the price was down 75%. This is a gift, I hope it sticks around a bit longer for you good folks.

 

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Soros is a bullish signal? Maybe long term, but not short term..
mrees999 wrote:

Then we have the news of George Soros fund starting to make a lot of crypto plays. I'm sure they have for a while, but why pick now to announce it? And the Rockefeller Foundation. Again, the timing of announcements isn't just by chance, there is something to be gained by it.  Three little nods together to boost a little confidence.  Let's see if that moves the needle.

Not that I'm complaining. It is only by looking back when you palm your head and realized you should have bought when the price was down 75%. This is a gift, I hope it sticks around a bit longer for you good folks.

Interesting info on the taxes, yep I had a look at last year and it was mid-April when the price took off, but of course a certain money printing machine fired up into action at the same time...

I agree with the comments on timing, I see the Soros and Rockefeller announcements and the other well timed seemingly positive sentiments as simply more manipulation. 

I am warming to the Wyckoff method being employed over a few weeks (maybe months).  So they sucker in folks thinking we have had a final rebound, to then heavily sell take profits and sink the market further down in a couple of flash crashes over a few weeks where they snap up more cheap BTC by scaring out the little guy...?  Rinse and repeat as necessary.

On the technical side, I'm seeing yet another hidden bearish divergence trying to form on higher timeframes, although that's yet to confirm or play out.  The charts do look like they are coming to a pinch point within the next week...

Dave makes a valid point of the possibility of a slow grind out at the bottom, maybe that's the power of the HODL movement that makes BTC different to other bubbles, a strong support at 6.6k with hardcore BTC Long term believers standing firm and not wavering? 

However I still think this doesn't feel low enough for a bottom of what has been the largest bubble in a while.  But heck, that's just my gut, the market and its various actors will show us what it and they have in store.

And again, I do appreciate folks continuing to respectively debate and share their musings on here, its good for me learning from everyone's perspectives.

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Wycliffe Accumulation phase

So it could appear BTC's various dips to 6.6k were all part of whales and insitutional accumulation.

Big players know folks need to sell at some point in March for taxes, they shake down the price towards a long term upward trend line, forces the tax payers hand and work their Wyckoff magic.

Compare the shape of this classic accumulation and recovery with the last month's price action.

Also keep in mind there's an the reverse of this pattern, maybe worth keeping an eye on that in the next few weeks.. Nothing to stop the big players taking the price down again to test $6k for another attempt at a shake out, but they could find it harder with so many determined HODLers.

I am still neutral if this really is the bottom for BTC for 2018, but if is then it should be interesting watching where the big institutions and whales want to take the price.  Google trends for buying bitcoin is still on the floor, there's relatively little public mania out there at the moment..

Interesting to hear the all time high demand for BTC in Venezuela this week,  that shows its appeal for certain countries.

https://www.newsbtc.com/2018/04/20/inflation-at-8900-turns-venezuelans-t...

 

 

 

 

 

 

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