Know Your Sh-- Er, Poop: Bitcoin Testing Its Bullish Status!
Updated
Hey there, TradingView... long time, no chat! If you're like me, you've been waiting the past two-plus months to find a clear sign that Bitcoin has either: (1) “officially” bottomed already, or (2) pushed itself to another point of capitulation, thus creating a new and (likely) final bottom. In the time since BTC dropped from 6K to 3.1K, it has not closed above 4.2K or below 3.3K. So this waiting game is starting to get tiresome…
Luckily, we’re finally seeing some major developments, and I’ll illustrate WHY THIS IS BIG by pinging off a pair of ideas.
IDEA ONE: Bitcoin may come to test its bottom via the 200-week moving average (by tabsports)
Back in December, I published the idea that I will not buy long-term just yet, because Bitcoin was testing the 200W-MA (around $3178 on Bitstamp at the time of publishing). I then concluded my idea by claiming that BTC will either: (1) fall below the 200W-MA, thus giving us one final bit of capitulation while establishing the long-term bottom, or (2) bounce back from the 200W-MA, only to revisit this moving average to test the “official bottom” of the post-19K bear market. The former situation would’ve established the bottom within weeks, while the latter meant we would need months to see the bottom.
As you can safely conclude, the former has played out. I published the idea in question on December 15. By the time the next weekly candle closed, BTC was up around the 4K range. It peaked at around 4.2K before Christmas, before the price eventually fell back to the 3.3K range at the Jan19-Feb19 turn of the month. At the time of the fallback, the 200W-MA was around at $3298.50 and $3315.57 on Bitstamp for the two weekly candles in that timeframe. ONCE AGAIN, Bitcoin bounced off the moving average, and it pushed back to the 4.2K peak before taking a regression-based tumble on Sunday.
Despite this development, I’m hesitant to call the bottom just yet. I was burned when calling the 6K bottom, despite Bitcoin resisting the bears at 6K about four or five times. Maybe it was too much natural bear pressure that caused the eventual breakdown. Maybe it was the Bitcoin Cash drama. Either way, it destroyed an idea that held up for six months. As a result, I’m going to be more cautious after taking that L.
IDEA TWO: Bitcoin may have established its bottom by breaching the 50-day exponential moving average (by MagicPoopCannon)
Here’s where I give somebody else props, because his idea gave me some inspiration. While MPC was calling a 3K bottom (or worse) back in April (or earlier), I was focused on short gains that were bouncing off a 6K bottom. That initial idea worked for me, taking Bitcoin from 6.8K on Coinbase at the time of publishing to 9.9K about one month later. However, that was merely a short-term triumph.
Now, it’s clear that 3K bottom was reached... or worse. If you sold at the dump below 6K, you didn’t suffer much. But if you held, odds are you are still hoping for a major recovery to help your gains. Luckily, MPC recently pointed out that Bitcoin has surpassed its 50D-EMA, and this is a bullish sign. (Seriously, go give a read to his ideas related to this focal point of analysis. He deserves credit for the insight.)
Using this idea as inspiration, I show in this chart a comparison between the 50D-EMA (amber) and the 5-day volume-weight moving average (dark grey). As you can see, the 50D-EMA is greater than the 5D-VWMA on Coinbase for the first time since the Aug18-Sep18 turn of the month. Indeed, this is a short-term bullish sign. However, now we must consider that $400 drop on Sunday. At the time, the daily RSI was overbought, and I personally stay away from buying. Sunday’s dump was pretty hasty and nasty, but it did the important thing of holding up at the 50D-EMA. It has even bounced back a bit in the past day. This is a potentially great sign that both the active Bitcoin price and 5D-VWMA will stay above the 50D-EMA for the upcoming days and/or weeks.
Keep an eye on how these two developments play out. Monitor the 200W-MA (Bitstamp), 50D-EMA (Coinbase) and 5D-VWMA (Coinbase). If the 5D-VWMA resists at 50D-EMA, it means the bulls have a chance to truly get this run going. If it fails and goes back to the 200W-MA, it means we’re left to speculate the Bitcoin bottom once again. And finally, if it breaks below 200W-MA, it would likely mean once final bit of capitulation. (The good news in the last case is that there’s a juicy buy and perhaps the much-desired arrival of the crypto winter solstice. Seriously, enough waiting... I'm eagerly awaiting the next crypto spring!)
So, to conclude, know your poop about these Bitcoin developments! THIS IS NOT ADVICE TO BUY OR SELL, but rather a call for further research on how Bitcoin is establishing/testing both its long-term bottom and short-term bull status. Once we see how these developments play out, we’ll know when and how to take some real action.
Until then, happy trading!
Luckily, we’re finally seeing some major developments, and I’ll illustrate WHY THIS IS BIG by pinging off a pair of ideas.
IDEA ONE: Bitcoin may come to test its bottom via the 200-week moving average (by tabsports)
Back in December, I published the idea that I will not buy long-term just yet, because Bitcoin was testing the 200W-MA (around $3178 on Bitstamp at the time of publishing). I then concluded my idea by claiming that BTC will either: (1) fall below the 200W-MA, thus giving us one final bit of capitulation while establishing the long-term bottom, or (2) bounce back from the 200W-MA, only to revisit this moving average to test the “official bottom” of the post-19K bear market. The former situation would’ve established the bottom within weeks, while the latter meant we would need months to see the bottom.
As you can safely conclude, the former has played out. I published the idea in question on December 15. By the time the next weekly candle closed, BTC was up around the 4K range. It peaked at around 4.2K before Christmas, before the price eventually fell back to the 3.3K range at the Jan19-Feb19 turn of the month. At the time of the fallback, the 200W-MA was around at $3298.50 and $3315.57 on Bitstamp for the two weekly candles in that timeframe. ONCE AGAIN, Bitcoin bounced off the moving average, and it pushed back to the 4.2K peak before taking a regression-based tumble on Sunday.
Despite this development, I’m hesitant to call the bottom just yet. I was burned when calling the 6K bottom, despite Bitcoin resisting the bears at 6K about four or five times. Maybe it was too much natural bear pressure that caused the eventual breakdown. Maybe it was the Bitcoin Cash drama. Either way, it destroyed an idea that held up for six months. As a result, I’m going to be more cautious after taking that L.
IDEA TWO: Bitcoin may have established its bottom by breaching the 50-day exponential moving average (by MagicPoopCannon)
Here’s where I give somebody else props, because his idea gave me some inspiration. While MPC was calling a 3K bottom (or worse) back in April (or earlier), I was focused on short gains that were bouncing off a 6K bottom. That initial idea worked for me, taking Bitcoin from 6.8K on Coinbase at the time of publishing to 9.9K about one month later. However, that was merely a short-term triumph.
Now, it’s clear that 3K bottom was reached... or worse. If you sold at the dump below 6K, you didn’t suffer much. But if you held, odds are you are still hoping for a major recovery to help your gains. Luckily, MPC recently pointed out that Bitcoin has surpassed its 50D-EMA, and this is a bullish sign. (Seriously, go give a read to his ideas related to this focal point of analysis. He deserves credit for the insight.)
Using this idea as inspiration, I show in this chart a comparison between the 50D-EMA (amber) and the 5-day volume-weight moving average (dark grey). As you can see, the 50D-EMA is greater than the 5D-VWMA on Coinbase for the first time since the Aug18-Sep18 turn of the month. Indeed, this is a short-term bullish sign. However, now we must consider that $400 drop on Sunday. At the time, the daily RSI was overbought, and I personally stay away from buying. Sunday’s dump was pretty hasty and nasty, but it did the important thing of holding up at the 50D-EMA. It has even bounced back a bit in the past day. This is a potentially great sign that both the active Bitcoin price and 5D-VWMA will stay above the 50D-EMA for the upcoming days and/or weeks.
Keep an eye on how these two developments play out. Monitor the 200W-MA (Bitstamp), 50D-EMA (Coinbase) and 5D-VWMA (Coinbase). If the 5D-VWMA resists at 50D-EMA, it means the bulls have a chance to truly get this run going. If it fails and goes back to the 200W-MA, it means we’re left to speculate the Bitcoin bottom once again. And finally, if it breaks below 200W-MA, it would likely mean once final bit of capitulation. (The good news in the last case is that there’s a juicy buy and perhaps the much-desired arrival of the crypto winter solstice. Seriously, enough waiting... I'm eagerly awaiting the next crypto spring!)
So, to conclude, know your poop about these Bitcoin developments! THIS IS NOT ADVICE TO BUY OR SELL, but rather a call for further research on how Bitcoin is establishing/testing both its long-term bottom and short-term bull status. Once we see how these developments play out, we’ll know when and how to take some real action.
Until then, happy trading!
Note
Update: 3-5-2019, 10:05 AM ESTThere's been generally sideways movement since the publishing of this idea, but something potentially important has happened over the past 36 hours. Bitcoin closed UNDER the 50D-EMA last night, but it has subsequently moved back above that line. Obviously, it still needs to close back above the 50D-EMA, but this could make further evidence that this moving-average line is acting as resistance for Bitcoin.
For now, I'm still holding, but the next 36 hours may provide a wealth of information of where Bitcoin is headed in the short term!
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