BTC done for now, my projection until Xmas

8 nov 2017

Well, that was interesting. And unexpected.

1. Segwit fork cancelled
That crazy segwit fork that no one really wanted anymore? Got cancelled just now. All the people that accumulated bitcoin in anticipation of the fork (like, getting out of alt-coins), well, no fork = no need to hold BTC for the fork.

2. BTC reached new ATH
Right at about the same time segwit got cancelled, BTC reached a new all time high. This A.T.H. was just about exactly what was expected: 1 september A.T.H. of $4930 times 1.61 (fibonaci) = $7935. Just like that 1 september A.T.H. was the June 11 A.T.H. of $3000 times 1.61.

My guess is that large bitcoin holders just decided to quickly push the BTC price onwards to this A.T.H. just to get a lot of uncertainty out of the market. It shot up from $7474 to $7888 in 30 minutes time and withdrew almost immediately.

All the people that held bitcoin in anticipation of this fibonaci all time high, well, fibonaci A.T.H. reached = BTC going down for the correction, just like it did in the previous cycles.

At this very moment, it's likely that a quite some BTC holders are still unaware of the all time high and the cancellation of the segwit fork, or not able to act on it yet (being at work, sleeping, driving etc). I therefore expect a further sharp decline in the coming hours

3. Alt-coins bottomed out
With a lot of people swapping alt-coins for BTC in anticipation of the 25 oct Bitcoin Gold fork and the (now) cancelled Segwit-fork, many alts have bottomed out. There's a lot of fuel for a new upswing all over the place. Most alts shot up after the fork cancellation and bitcoin A.T.H. and will imho continue to do so in the coming days.


So I'm expecting a BTC correction following a somewhat similar pattern like after the A.T.H.'s of 1 september ($4930) and 11 june ($3000). However, since it this current cycle has been a bit overextended thanks to the segwit fork timing, the bearish period could be shorter than usual.

If the previous 2-month cycles repeat, it's possible that a new A.T.H. of about >10K could be reached somewhere among Xmas en New Year. Fibonaci puts it at about 7935*1.61 = 12.7K but I would not bet on these cycles staying 100% predictable forever.

/edit - Disgusting. Xmas has apparently become so commercial it even has its own stock symbol :)

9 nov 2017

Nota

The decline is not as sharp as I expected. The market looks very uncertain at the moment.

However, my outlook is quite bearish at the moment for several reasons.

a) the segwit fork showed the world that Bitcoin is not the ideal decentralized coin that would not be manipulated. My take is that people will start to realize the market has been played, and that won't do much good for the reputation of bitcoin. I'm expecting a negative reaction to negative publicity in the coming days.

b) Before the oct/nov forks, bitcoin and altcoins lived happily together. But approaching the forks, people had a reason to get out of altcoins and into bitcoin.
That meant they were competing with eachother, and the price correlation quickly became inverse (see chart below)
Now that the forks are history, there is no need for these correlation to be linked, and thinks will likely swap back to where they used to be: bitcoin and alts moving freely and to a high degree independently of eachother.

With many alts having bottomed out because of people selling them for the forks, many of them have only one way to go: up. And because the price correlation with BTC will start to wear off, they will likely go up *regardless* of whether BTC wants to go up or down in the coming days. And in turn that will mean that BTC hodlers will notice alts moving up quickly, but their BTC being just about at an all time high. Which that will draw them back to alts one way or another, and which will then lead to less momentum for BTC, thus a downward trend.

9 nov 2017

Nota

Not putting that quite correctly. There always is a small inverse price correlation between bitcoin and altcoins. But it got immensely exaggerated in the last couple of months running up to the forks. With alts being at the bottom and likely to rise, the correlation will become less and less noticable, close to insignificant. The upward al trend will get the upper hand, and that will draw BTC holders back to alts.

9 nov 2017

Nota

Bitcoin is extremely undecisive, just about flatlining.

Alts are not waiting anymore though. THey are in rising wedges all over, turning their 24h gain numbers to 10-30% all over the board. More and more bitcoin holders will start to realize that. Somewhere in the back of my head a scenario is nagging me where I am not ruling out that we could get to see mass FOMO with bitcoin holders jumping on the bandwagon, altcoin prices going through the roof and bitcoin heading to a painfull black friday style crash.

Not saying it will happen. But not ruling it out either.

9 nov 2017

Nota

Thinking of it this way: the price correlation between bitcoin and altcoins acts like a swing. It's rocking back and forth. Now, because of the forks, the swing got pulled higher and higher towards bitcoin. It was let loose yesterday, and is going to move back to altcoins with far greater volatility than usual. I am just hoping the greater speed doesn't cause any serious or even lasting damage.