HISTORY DOESN'T REPEAT ITSELF, HOWEVER THEY ARE OFTEN ALIKE.
Sounds familiar, right? Well, I want to repeat that sentence, as I feel I have to in the current market circumstances.
What's the hardest part to deal with in trading land? Well, social media. When a few people start to become bullish, the whole group is taking over, while there are not many reasons to do so. Given that I'm sceptic on the past upwards movements, I've got to defend myself around 30 times on a daily basis, which is even harder than just trading in any normal sence of the word, so therefore I'm just using TradingView as my full write-up on the perspectives on Bitcoin and also my own thoughts regarding the market.
A few things I'd like to discuss before continuing on the analysis here.
First of all, people are 'only' comparing the past movements on Bitcoin with the movements of Bitcoin in 2015, where Bitcoin already stabilized and went sideways. Some of them are already comparing the movements to the latest part of that sideways notion, as the 'candles' are looking like the same. Excuse me, why are we just not using the part where we lost the first support there and made a rising wedge? Why are we not using the first part of that sideways action in case we are indeed going sideways from here?
I don't see much bullishness personally. If I want to see bullishness for certain, I'd want to see increase in volume here in the upwards movements, as that's a major signal of continuation upwards. All I'm seeing is that the volume is completely vanishing away in the past weeks and looking like it's an upwards correction in a still downwards trending market. Why? Well, we didn't break any downtrend yet, so we can't state that wére in a bullmarket nor that we're going sideways. And even if we're going sideways, a retest of the bottom is quite likely for support confirmation there. So, enough reason to be cautious.
Another thing that's quite irritating to me lately is the notion of people stating that the weekly Stoch is unusable. Excuse me? It's an indicator on a high timeframe, indicating that things are topped out. Especially in downwards markets a very strong signal and the higher the timeframe, the stronger it is. Ok, it might be lacking a bit, but still. Excuse me?
Last thing I'm getting irritating about is that people are still waiting for altseason. In the past weeks we've had rallies on the major altcoins. Some of them pumped 50-100% already. For instance ADA (Cardano) is up 125% since the beginning of December and now rejected at a major resistance. For instance ONT (Ontology) is up 180% since the bottom. Also smaller altcoins jumping around with for example RVN and ENJ being the biggest ones.
So, personally I'm thinking we've had a slight altseason already, but who knows.
Then getting towards the TA, which I've also described fully in my earlier post. Thanks for all the views, really appreciated that and the positive reactions from my post. Lately many people have been checking out the movements on the BTC dominance chart to see whether we're having an altseason.
Let's check some of the things we see on there:
- We tried to drop below 50 -> rejected.
- Weekly Stoch on BTC dominance is bottomed out. Last times that occured was:
31 December 2018 (the less significant one, as we were around $3,900 back then and made another trap upwards)
12 November 2018 (before the big dropdown, the actual day before it happened)
14 May 2018 (the day we crashed from $10,000 and dropped down)
around 2-5 January 2018 (the period we finished the insane altseason and dropped down, due to the trap on BTC)
- Interesting on the side is that all major alts/usd pairs and BTC/USD itself have their Weekly Stoch at the top. Hmm, interesting, right?
- Another interesting thing is that on the daily we've got bulldivs on the Bitcoin Dominance chart and the bitcoin dominance is actually already crawling upwards.
So, that's that.
We all have the other arguments in the other article (20 MA, ABC corrective waves, major rejection 4 weeks ago, ETH longs), we can also add that the XRP longs are going skyrocket lately, causing it to go to levels we've only seen before at the following dates:
- 12 November 2018
- 6 May 2018
- 20 December 2017
Interestingly enough, this is almost identical to the ETH longs charts and to the data we've got from the bitcoin dominance.
Then finally we've got another thing coming up this week/weeks. The first deadline for both the Bitwise and VanEck ETF proposals. We also know that the first one made an article in which they state that 95% of the volume is fake on the exchanges. We also know that the majority replied negative on the questions from the SEC.
So, we've got three possible solutions coming up out of this:
- Approval. Seems very very unlikely with the upwards stated things. Gold ETF took a very long time, while BTC is way smaller and way more unstable than Gold and without regulation at this point. I don't see this as likely, but we could see that happening in combination with a major breakout to the upside of the market.
- Delay. Seems most likely. Last few times this didn't make any big adjustment to the market, but maybe given the level we're standing on it could push us downwards.
- Denial. This would be a very heavy event on the market, as a denial is a straightforward decision and could help us downwards on the market.
Enough things to look for in this period, but what scenario's do we got then?
Well, the first scenario is the one I've described earlier on, which is the one with the red arrow.
Given the overall bullish sentiment, while the weekly is not looking too strong and I don't find the movements to be a bottom forming pattern (rather just upwards corrective waves in still downwards impulse waves) I'd say a break downwards here could cause a downwards dropdown towards $2,400 area, which lines up with the 1.618 fib level of this whole upwards corrective wave + the orderblock there + the 0.886 fib level from the whole upwards move in 2017 (previous cycle). This is still my main scenario.
The second scenario is the blue line, which goes hand in hand with the movements we've seen in 2015. In 21015 we've had a major trap and HH formed, after which we've seen a big dropdown (the trap) causing the market to turn downwards quite severely after this. Seems meh to me, as we've had such a pattern already 4 weeks ago, causing a dropdown of around $500 within a few hours. No, this is not profit taking, this is just a heavy rejection. Gravestone doji on the weekly on ETH also gives me struggles to believe that we can actually make a new higher high.
The last scenario is the one standing in the chart. For that I'd like to see a massive breakout upwards out of the downtrend line + retest of hte $4,100 level as support with normal patterns (so not something like we've seen in the beginning of January -> break upwards and immediate drop through support). This most likely has to go with FA events and probably the acceptation of an ETF or something else. Still given TA the most unlikely one.
So, stay safe. Decisive weeks on Bitcoin and I'll be updating this one later this week. Will also post an update on ETH soon.
Sounds familiar, right? Well, I want to repeat that sentence, as I feel I have to in the current market circumstances.
What's the hardest part to deal with in trading land? Well, social media. When a few people start to become bullish, the whole group is taking over, while there are not many reasons to do so. Given that I'm sceptic on the past upwards movements, I've got to defend myself around 30 times on a daily basis, which is even harder than just trading in any normal sence of the word, so therefore I'm just using TradingView as my full write-up on the perspectives on Bitcoin and also my own thoughts regarding the market.
A few things I'd like to discuss before continuing on the analysis here.
First of all, people are 'only' comparing the past movements on Bitcoin with the movements of Bitcoin in 2015, where Bitcoin already stabilized and went sideways. Some of them are already comparing the movements to the latest part of that sideways notion, as the 'candles' are looking like the same. Excuse me, why are we just not using the part where we lost the first support there and made a rising wedge? Why are we not using the first part of that sideways action in case we are indeed going sideways from here?
I don't see much bullishness personally. If I want to see bullishness for certain, I'd want to see increase in volume here in the upwards movements, as that's a major signal of continuation upwards. All I'm seeing is that the volume is completely vanishing away in the past weeks and looking like it's an upwards correction in a still downwards trending market. Why? Well, we didn't break any downtrend yet, so we can't state that wére in a bullmarket nor that we're going sideways. And even if we're going sideways, a retest of the bottom is quite likely for support confirmation there. So, enough reason to be cautious.
Another thing that's quite irritating to me lately is the notion of people stating that the weekly Stoch is unusable. Excuse me? It's an indicator on a high timeframe, indicating that things are topped out. Especially in downwards markets a very strong signal and the higher the timeframe, the stronger it is. Ok, it might be lacking a bit, but still. Excuse me?
Last thing I'm getting irritating about is that people are still waiting for altseason. In the past weeks we've had rallies on the major altcoins. Some of them pumped 50-100% already. For instance ADA (Cardano) is up 125% since the beginning of December and now rejected at a major resistance. For instance ONT (Ontology) is up 180% since the bottom. Also smaller altcoins jumping around with for example RVN and ENJ being the biggest ones.
So, personally I'm thinking we've had a slight altseason already, but who knows.
Then getting towards the TA, which I've also described fully in my earlier post. Thanks for all the views, really appreciated that and the positive reactions from my post. Lately many people have been checking out the movements on the BTC dominance chart to see whether we're having an altseason.
Let's check some of the things we see on there:
- We tried to drop below 50 -> rejected.
- Weekly Stoch on BTC dominance is bottomed out. Last times that occured was:
31 December 2018 (the less significant one, as we were around $3,900 back then and made another trap upwards)
12 November 2018 (before the big dropdown, the actual day before it happened)
14 May 2018 (the day we crashed from $10,000 and dropped down)
around 2-5 January 2018 (the period we finished the insane altseason and dropped down, due to the trap on BTC)
- Interesting on the side is that all major alts/usd pairs and BTC/USD itself have their Weekly Stoch at the top. Hmm, interesting, right?
- Another interesting thing is that on the daily we've got bulldivs on the Bitcoin Dominance chart and the bitcoin dominance is actually already crawling upwards.
So, that's that.
We all have the other arguments in the other article (20 MA, ABC corrective waves, major rejection 4 weeks ago, ETH longs), we can also add that the XRP longs are going skyrocket lately, causing it to go to levels we've only seen before at the following dates:
- 12 November 2018
- 6 May 2018
- 20 December 2017
Interestingly enough, this is almost identical to the ETH longs charts and to the data we've got from the bitcoin dominance.
Then finally we've got another thing coming up this week/weeks. The first deadline for both the Bitwise and VanEck ETF proposals. We also know that the first one made an article in which they state that 95% of the volume is fake on the exchanges. We also know that the majority replied negative on the questions from the SEC.
So, we've got three possible solutions coming up out of this:
- Approval. Seems very very unlikely with the upwards stated things. Gold ETF took a very long time, while BTC is way smaller and way more unstable than Gold and without regulation at this point. I don't see this as likely, but we could see that happening in combination with a major breakout to the upside of the market.
- Delay. Seems most likely. Last few times this didn't make any big adjustment to the market, but maybe given the level we're standing on it could push us downwards.
- Denial. This would be a very heavy event on the market, as a denial is a straightforward decision and could help us downwards on the market.
Enough things to look for in this period, but what scenario's do we got then?
Well, the first scenario is the one I've described earlier on, which is the one with the red arrow.
Given the overall bullish sentiment, while the weekly is not looking too strong and I don't find the movements to be a bottom forming pattern (rather just upwards corrective waves in still downwards impulse waves) I'd say a break downwards here could cause a downwards dropdown towards $2,400 area, which lines up with the 1.618 fib level of this whole upwards corrective wave + the orderblock there + the 0.886 fib level from the whole upwards move in 2017 (previous cycle). This is still my main scenario.
The second scenario is the blue line, which goes hand in hand with the movements we've seen in 2015. In 21015 we've had a major trap and HH formed, after which we've seen a big dropdown (the trap) causing the market to turn downwards quite severely after this. Seems meh to me, as we've had such a pattern already 4 weeks ago, causing a dropdown of around $500 within a few hours. No, this is not profit taking, this is just a heavy rejection. Gravestone doji on the weekly on ETH also gives me struggles to believe that we can actually make a new higher high.
The last scenario is the one standing in the chart. For that I'd like to see a massive breakout upwards out of the downtrend line + retest of hte $4,100 level as support with normal patterns (so not something like we've seen in the beginning of January -> break upwards and immediate drop through support). This most likely has to go with FA events and probably the acceptation of an ETF or something else. Still given TA the most unlikely one.
So, stay safe. Decisive weeks on Bitcoin and I'll be updating this one later this week. Will also post an update on ETH soon.