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Four Simple Reasons Bitcoin Bear Market Ended This WeekTL:DR: The ADX, SAR, and NVT have both crossed key thresholds with a trendline break. We are now in the early stages of a bull market that will probably last more than a year and a half. Indicators Dynamic Network Value to Transactions Ratio by aamonkey Bitcoin is the name of a payment network as well as the currency used on that network and the smallest division of that currency is the satoshi. This is compared to the dollar, which circulates around the world in the SWIFT system with the smallest division that most people use is the cent. The Network Value Transaction ratio represents the cryptocurrency’s network value (which is its current market capitalization) and the transaction volume that’s transmitted through Bitcoin’s blockchain over a period of 24 hours. IN other words, how much is money moving around compared to cost of bitcoin. It is closely related to the idea of the velocity of money. All things being equal when the velocity of money picks up things get expensive. It is a fundamental law of money that many Keynesians want to ignore or unintentionally misunderstand. The indicator is simple to understand. When price is in the green the smart money looks to accumulate/absorb bitcoin and other cryptos and when the NVT moves to the red or even outside the red smart money looks to sell. Bitcoin has limited history but the tendency so far is for the weekly NVT to go coast to coast from the green into the red and it takes well over a year to do so. Average Directional Index D+ and D- The ADX quite simply tells you how strong a move is. It uses a true range calculation to measure a D+ that compares previous high to one another. When you have higher highs the D+ in green goes up. The True Range Calculation also compares lows and when the lows are lower the D- goes up in red. When the green line is above the red line the trend is bullish and the higher it is above the red line the more bullish things are. When the red line is above the green line price is trending down. When they cross it indicates neutrality, or in other words, price has moved sideways long enough that the positive and negative price action neutralized one another. It is possible for the D- and D+ to braid and cause a lot of damage to traders so the indicator is best used as part of a collection of indicators or to confirm a chart formation breakout. In our case we use the ADX D+ crossing above the D- to confirm the break of the long-term resistance line. The break of a long term trendline and other indicators makes it more probable that we will have a sustained increase in D+ and it won't painfully braid. Parabolic Stop and Reverse The Parabolic SAR is very similar to the volatility stop which is based on the average true range, but it also has an acceleration factor so the faster that price moves the tighter the indicator is to price. This helps you get out of the top of impulses and can give the indicator a resemblance of a parabola. It can be used to signal a shift in trend and to confirm break outs. Analysis The ADX and SAR are closely related indicators (invented by the same gentleman, the departed, J. Welles Wilder Jr.) and they are designed to be used together. They both confirm price has broken out of a downtrend by breaking the trendline. Based on that alone it is very likely we will never close a weekly candle below 16,000 ever again. The NVT coming out of the value area has twice before signaled the beginning of a bull market and it is no surprise it has occurred very closely in time to the trendline break and indicators flipping bullish. My Current battle Plan I currently plan to use a pull back strategy. My bias is bullish so pull backs will be bought, especially those that have bullish divergence. So long as the weekly NVT has not gone outside of the red I or there starts to be some bearish divergence on the weekly I look to buy. I am expecting multiple pull backs greater than 30 percent. I do a lot of TA on bitcoin as it is the benchmark of crypto. Now it is moving I can aggressively buy alts and judiciously use margin when I see that hidden bullish divergence. Linked Ideas I am always glad when I get an idea out before larger platforms do and my Dollar Death Cross post predates most people talking about the death cross and it was something I found independently while doing my analysis for the new year. The bearishness in the dollar supports my notions that a crypto bull market is upon us. My other linked post shows my absolute banger of an entry into OP. It is actually quite frustrating to be on pull back strategy on OP when it has had no pull daily or 3d pull backs since my entry.
INDEX:BTCUSDLong
by This_Guhy
6
Bitcoin poised for a serious correctionIntroduction Bitcoin has shown a lot of strength since I called the end of the bear market mid January. That was somewhat of an audacious call but so far it has played out in my favor. Nothing goes straight up and it seems that the time for bitcoin to have its first major pull back is upon us. This is also my first post after being designated a “wizard” so I am caught between a couple of tensions. One is to keep on posting the quality of content that got me appointed (which is opaque to me). The other tension is to not be a try hard. Primer on Divergences Normal Divergence (Trend Reversal) Bearish: Higher highs on price action but lower highs on the indicator Bullish: Lower lows on price action but higher lows on the indicator Hidden (Trend Continuation) Bearish: Lower high on the price action and higher highs on the indicator Bullish: Higher low on the price action and a lower low on the indicator Indicators Dynamic Network Value to Transactions Ratio by aamonkey Bitcoin is the name of a payment network as well as the currency used on that network and the smallest division of that currency is the satoshi. This is compared to the dollar, which circulates around the world in the SWIFT system with the smallest division that most people use is the cent. The Network Value Transaction ratio represents the cryptocurrency’s network value (which is its current market capitalization) and the transaction volume that’s transmitted through Bitcoin’s blockchain over a period of 24 hours. In other words, how much is money moving around compared to cost of bitcoin. It is closely related to the idea of the velocity of money. All things being equal when the velocity of money picks up things get expensive. The indicator is simple to understand. When price is in the green the smart money looks to accumulate/absorb bitcoin and other cryptos and when the NVT moves to the red or even outside the red smart money looks to sell. This is time frame dependent. Right now we are quite hot on the 3 day time frame but no where near where I would be concerned on the weekly. This circumstance makes it very painful to hold leveraged longs but also difficult to go short because that is against the larger trend. In other words, it is very easy to lose money here. Average Directional Index D+ and D- The ADX quite simply tells you how strong a move is. It uses a true range calculation to measure a D+ that compares previous high to one another. When you have higher highs the D+ in green goes up. The True Range Calculation also compares lows and when the lows are lower the D- goes up in red. When the green line is above the red line the trend is bullish and the higher it is above the red line the more bullish things are. When the red line is above the green line price is trending down. When they cross it indicates neutrality, or in other words, price has moved sideways long enough that the positive and negative price action neutralized one another. It is possible for the D- and D+ to braid and cause a lot of damage to traders so the indicator is best used as part of a collection of indicators or to confirm a chart formation breakout. Here the D+ is showing hidden bearish divergence. The trend is exhausting and we can se the D- is poised to begin swinging upward. Relative Strength Index This is one of the fundamental indicators for most traders. It compares average gains to average losses and when the average gains are more than the average losses price goes up. When the RSI is falling but price is still going up it is a sign that reversal is near. Technical Analysis The divergences are pretty easy to see and I am confident that there is a great dip buying opportunity brewing. Where the low is going to be is hard to say. How long it will take is also very difficult to determine. To make it easy for me, I will look to buy again when the NVT is green again on the 3 day. Should help me stay patient. A 25% drop is very do able at this point. It would be price returning to a trendline that helped set up this uptrend. I hope to see some hidden bullish divergence when this bases out, which means I would want the RSI, MACD, etc, to be lower than then when this uptrend began. I don’t think the gaussain channel or the ketner will confine price action during this dip. This weakness in bitcoin puts a lot of other long trades at serious risk. It is very hard for other cryptos to stay strong If you are holding be prepared for the value to go down. If you are margined be prepared to have your stop strategy tested. Fundamental Analysis (technical analysis on the dollar) DXY looks like it has caught support on both the Gaussian and Keltner channels and has set a double bottom. This sets up some W targeting with a fib draw from the low to the high of the bridge of the W. That target is in a lot of as it is in the micro bull trap of the previous high and against the trend line that was previous support and most likely resistance when tested again. This fits my larger view on the dollar that it will have to retest its previous wedge resistance as support. This means something big is coming for the dollar and therefore the globe. I wonder what kind of dreadful evens will feed into the dollar decline. This zigzagging of the dollar is going to make dollar alternatives go crazy. My Realistic worst case scenario for BTC I have been operating under the assumption the low is in. If not, the easiest target to set is back to $10k. While I don’t expect it to happen it is the easiest way my analysis has been wrong and one I have to prepare for. Conclusion These are trying economic times. Trading discipline are going to be key as the dollar whipsaws around and people try to position themselves long, short and sideways. This is not the time to be opening trades without a good entry system and a good system to take profit and set stop losses.
INDEX:BTCUSDShort
by This_Guhy
15
Bitcoin's weekly OBV, NVT and Hash Ribbon Bear Market ChecklistTL:DR: The Bear market inflection is NEAR, it has not occurred. More time to accumulate (or get wrecked using margin). QRD: Bottoming structure not yet clear, OBV 10 has not bullishly crossed the 20 below 100 yet. Price still below blue resistance line. NVT shows bear market inflection, as does the Hash Ribbon. Inflection score is 2/6. Introduction There are two major concepts this post is broadly dealing with. The first one volume and its interpretation and the second is looking at bitcoin as a payment network with its own native currency. The United States has a payment network and it uses dollars. The European Union has a payment network and it's currency is creatively called the Euro. Similarly, the bitcoin network currency is as creatively named: bitcoin. A trite saying is bull markets end with a roar and bear markets end with a whimper. I am looking for the point where the bear market whimpers its last and we are getting pretty close on a robust set of criteria. With a sorter list of criteria, I think one could already call it based on the Hash Ribbon firing its buy signal while the NVT is green and the OBV 10 and 20 SMA were both under the 100 SMA but I personally can't do that without a bottoming structure and while price is still below the blue trend line. Volume analysis There are several proper ways of looking at volume. There is the standard volume by timeframe that many people use, with red or green bars stacked across the bottom of their chart. The volume profile is also very useful for determining where price action support and resistance is supported by volume. Lots of price action with very little volume behind it suggest that the next move could move through that price action quite quickly. The volume indicator I have spent a couple of years tinkering with is the On Balance Volume with Moving Averages. To keep the charts visually simple I have made the decision to just focus on the moving averages. A common phrase in trading is exhaustion. Bear markets end when sellers are exhausted. There is no real indicator I know off that spits out a buy signal when sellers have been exhausted so I have been working on a system to determine that. Bitcoin and crypto is very volatile and so the weekly time frame, so far, has back tested quite well. Equities and commodities still need some tinkering with for this system to work. The bold green line is the 100 SMA of the On Balance Volume. When the OBV is at the 100 it is a sign of some significant sideways movement or a prolonged period of selling from a previous all time high. When the 10 or 20 OBV SMAs go below the 100 we are deep in a bear market where we can expect to get the best value should price recover. Previous bear Markets The 2015 bear market had a massive W bottom with the second low being lower than the first low. That would have been very painful for anyone setting their stops for a high low W reversal. The OBV SMAs crossed several times down there and very certainly a lof of traders got whipped out of their positions while investors and smart money did what they could to buy the lows. The 2018 and 19 bear market bottom was a beautiful ascending trianle that had massive amounts of over-performance to the upside. I spent most of that uptrend waiting for a pullback that never came and that is why looked at creating this system, so I could predict such impulsive moves before they come. Current Bear Market The On balance Volume 10 and 20 SMAs are deep under the 100 which suggest a great time to accumulate The 10 has not crossed the 20 yet so the bear market inflection, based on volume, has not happened just yet. Bitcoin does not appear to have a long-term reversal structure yet, a W bottom or ascending triangle seem most likely. It does not seem like we are going to have anything resembling saucers and so far a inverted head and shoulders doesn't seem likely. NVT Analysis As stated above, bitcoin is a payment system, called bitcoin, and the currency of the bitcion network. When someone buys bitcoin they are buying currency of that network to use that currency network at a later point in time or to sell to someone else that wants to use that currency network. This marvelous version of the NVT is very useful as it can help us determine when the currency is relatively cheap compared to how much the network is being used. If we want to use the network for payments this is the time to do it. Likewise, if we want to get a good price on the currency to use later, either by sending bitcoin or selling it we would do that now. The system is pretty simple with the NVT. If the NVT is green and is moving sideways, not down) we have reached an inflection point with the NVT. Hash Ribbon The hash ribbon can be pretty noisy with all of the different signals you can have it spit out. For this system there is only one signal we want, the buy signal, and we only want it at one time. when the OBV 10 and 20 are below the 100 while the NVT is deep in the green. Since we have this the Hash Ribbon inflection has occurred. After All Signals Fire Once all signals for a bear market inflection are in we will be in the early stages of the bull market. For me, that will be as the NVT goes into the yellow but before the first flash of red. Around the same time the OBV 10 and 20 SMAs will be crossing above the 100 SMA. This is the area between the black and orange lines on the chart. What I am doing I am looking to shovel quite a bit of money into some of my preferred alts so long as bitcoin is below the black line. And by shovel I mean I am selling leave at work as it comes by, picking up overtime, eating more oatmeal and eggs because they are cheap and filling, reducing my vice purchases (only the most affordable box wines for me now). I do see a stall occurring around 46,000 (the orange Line) but I don't think it will be similar to the C19 dump. But I do intend to take off some profit there for pay myself back for the quality of life I have been deferring. It is still way to early to tell, but I have a suspicion that Optimism might be this upcoming bull markets Solana. I definately have a position on and if it goes above the 2.618 I will be quite happy. If it approaches the 3.618 as Solana did I will be retired by next July.
INDEX:BTCUSDLong
by This_Guhy
3
Bitcoin Weely NTV and Gaussian Channel signal accumulation timeThe idea is pretty straight forward. Some ideas are targeted at traders and others are targeted towards investors. This idea is targeted more towards investors than traders but it can be used by both. Bitcoin is a decentralized payment network while also being the name of the native currency of that network and the satoshi is the smallest unit of currency. Compare that with the SWIFT payment system which uses the dollar as currency with the cent as the smallest unit of currency. Sometimes the system is cheap to use, and sometimes the system is expensive to use based on the network fees. The NVT helps us find times when the network is undervalued in some conceptual way. What do investors want to do? Buy things when they are relatively cheap and sell them when they are relatively expensive. This NVT by aamonkey helps us do that. Likewise the weekly gaussian channel also helps us identify when something can be undervalued historically and help us with some long term planning. Perhaps you find buying underneath the red Gaussian channel to risky, because of how low prices could continue to go. Maybe wait for prices to get back inside or above, depending on your risk tolerance and how you want to manage the stress of investing or trading. Likewise the trendlines also give you some resistance to watch for break outs. I personally have some altcoins I have been watching for a while and I like how they are looking individually and against BTCUSD. I think I will be taking my investments on them for now and they will be in the linked ideas. But either way I see it as time to accumulate, so I will.
INDEX:BTCUSDLong
by This_Guhy
4
Bitcoin and a simple NVT StrategyFundamentals Despite some confusion bitcoin is both a decentralized payment system and the name of the currency of the network. In contrast, SWIFT is a centralized payment system that has the dollar as its currency. Bitcoin's greatest value is when the currency is undervalued to the value of transactions it is running. That is when the system is the cheapest to use. It is the most expensive to use when the NTV is high. People with a lot of executive function will plan their purchases of things when they are cheap and sell them when they are expensive. We all wany to do it, some of us are better or worse at it. Technical Analysis This marvelous NVTwas created by aamonkey and it helps show when the price of bitcoin about fair value (yellow) or when it is overvalued (red abd above) and undervalued (Green). It is of course sensitive to time frame and I have used it to call for rallies from time to time with warnings that they could just be setting up local highs before going for local lows. The main chart points out the series of operations well enough that I don' think I should replicate it here. I have some other posts where I was watching some triangle or channel formations and if they held that would have signaled a lot more upside. But all that is trumped by the NVT going green on the weekly. History has shown the pattern that when the NVT goes into the green on the weekly it is a vicious bear market. As much as I want gains to the upside the formations broke down. The chart below shows the triangle I was previously biased bullish on. No doubt it broke down. Price can impulse from here to the downside or it can rally and get back into the triangle or get rejected by previous support. The NVT suggest a bias to the bearish scenarios. My Positioning I have in large part left BTC alone because it was range bound and I have not seen an overriding signal to the upside or downside. I have mentioned in several post that I see several triangle formations that could be played very technically but I don't like to play triangles as they are the formations taht are the easiest to recognize but the worst at performance unless they are in a wider structure. Having seen the NVT finally turn green on the weekly time frame leads me to conclude that the bear market is fundamentally in. Even though the network is undervalued by a key metric history has shown that the price will experiences significant more downside and it is during the bear market that accumulators will eventually step in... way lower than most expect If you want to use the bitcoin network as it is intended, as a decentralized payment processer, then this is the time to do it. If you are looking for bullish continuation now is not the time. I am looking to trade things that are moving impulsively with a bullish bias. I continue to see XMR in a bullish cup and handle and will be looking to get dem gains. My linked ideas show my bullish set up on monero as well as my totally bearish set up on bitcoin.
INDEX:BTCUSDShort
by This_Guhy
1
Update 2 on the BTC Log XABCD Butterfly & operating assumptionTLDR : Current price action around the $60.6k (1.618fib) target has put the $375k (2.618fib) target into play. Also the NVT is poised bullishly. Confirmation has not occurred for either so margin trading is for degenerates (like me) only. View the linked ideas for more information on the log harmonic XABCD butterfly, which is a very technical formation. Introduction My linked ideas will go over the log butterfly and why I think it is a valid formation. Those ideas have focused on the 1.618 target but technically I see the justification in the chart that puts the 2.618 closer into reach. I am pattern trader first and I use indicators to help clear up my biases and set up my trades. For example, volume is suppose to confirm all patterns. I like my margin trades to be backed up with a lot of standard and hidden divergences as possible. I was right when I called the stall at 1.618 based on the chart pattern and now there is a nested structure that can get price above the all time high, which means that an impulse to 2.618 is realistic and even probable. Analysis The NVT is now in the green on the 5 day, which is a pretty high time frame for it to be green on. Using the NVT isn't an exact science, but broadly speaking the longer it is in the green the more oversold it was, so the better the recovery, and the higher the time frame it enters the green on the more oversold bitcoin was compared to the network transactions values. Even if the NVT is only in the green for a few periods on the 5 day it has rallied some 40% when it enters the yellow again. If this uptrend is powerful enough we can set new highs. At the least we should get something resembling a beautiful bull trap. The butterfly target of 1.618 has a downside target of about $625.00 That is pretty hard for people to comprehend, but that is fine. The target is the target none the less. Now the main chart shows the targeting if price reaches the 2.618 target. That target is comically low at less than $250 of full performance. Harmonic patterns are kinda humours to me in a way, because price goes up "bearishly" and down "bullishly" before the pattern snaps and targets get hit. A key point to note is that every point on the way down, X, A, B, and C are all legitimate places for the price action to stall and the pattern was still valid. If I post an update to this idea and price goes up to the 2.618 target and wicks through on the monthly and then falls to B at $13.8k and stalls there I see this series of ideas as an absolute win. The chart below shows some flagpole analysis and is the nested structure that can perform to get price moving. Operating Assumptions Broadly speaking, in bull markets when you see a pattern you expect it to break bullishly, even if it is a neutral pattern. If you are trading and you find you are getting formation not quite reaching target or reversing on you so quickly you didn't move your stops to break even or to take partial profits then that is a sign the trend is changing on you. While Bitcoin was topping in 2021 my shorts did very well when things triggered. When I saw that patterns were not breaking down anymore it was time to reassess. For the last month or so my shorts have done very well again, but the last couple of ones have stalled. I went from getting full performance or over performance to having to close my shorts manually because they looked like they ran out of steam and then finally I was either stopped out just in the money or for a loss. So it is time to reassess trend. I am comfortable swing trading once I have a bias but I do best when I only take one kind of trade, either all longs or all shorts, or I wait to decide what to do. If I find myself tempted to trade against my bias then it is time to wait and reassess. My linked ideas will show why I am so macro bearish, and even this formation goes up "bearishly" so I don't feel I am contradicting my recent posts with this idea. When you have weird economic conditions you can get a crack up" boom "A crack-up boom is the crash of the credit and monetary system due to continual credit expansion and price increases that cannot be sustained long-term. In the face of excessive credit expansion, consumers' inflation expectations accelerate to the point that money becomes worthless and the economic system crashes. The term was coined by Ludwig von Mises, a noted member of the Austrian School of Economics and personal witness to the damages of hyperinflation." (www.investopedia.com) I have a strong suspicion when all this is done if you cant live in it, eat it, or are addicted to it then that asset will be sold off first. That is how we get bitcoin to lose over 99.9% of its value. It isn't that far off when you have a bit of economic history that you lived. I was a young man when the dotcom bubble popped but I still read enough news to find out people lost fortunes holding on to stuff that lost over 95% of its value. My uncle worked in Silicon Valley in the tech industry and was very opinionated about outsourcing, the fact that tangibles will keep their real use value when you are hungry. He was able to make it through comfortably because he sold his company stock wherever it went up "too much". Lessons like that don't just go away easy. Below are some of the top looser of the dotcom bubble burst. As you can see, they all lost over 85% of their value two or three times. The psychological damage can be very intense now lots of these companies, which made physical deliverables, are also pumping again. But if these investments can lose over 95% of their value, something like bitcoin, which loses 30-50% of its value and gets it back as a matter of routine, is up for quite the beating. Even a company like Ford, with very tangible products and assets can lose over 95% of its value. Anyway, back to trading. The flagpole chart has very easily discernible tradable entries and exits to even a new textbook trader. If we don't break the channel on the weekly time frame with a full body then the idea that price can to to the 2.618 level gets negated real quick. If price sets a new low then the idea we can get to the 2.618 level in short order gets negated. I see some bullish line breaks and chart formations on some alts I am going to margin trade long like a degenerate. But as soon as I get done with this post I am moving my stop to guarantee a tiny bit of profit and cover my funding expenses. I have enough TA to justify operating under the assumption that Bitcoin can reverse here and at least move up to 70k. In fact, the log XABCD Butterfly both justifies the stall here at 1.618 and the move higher, so I am going to go with that as well. My most recent trade I have not been posting too many of my alt coin trades just because I have a lot going on and those ideas can take a lot of energy and not get a lot of traction due to how few people look at them. Right now I like dydx as a long because of how strong it looks against eth and btc as it sets a floor. This trade is hoping a small ascending triangle gives me a good entry on a pump that gets price out of the falling wedge. I will be moving my stop to guaranteed profit here shortly but I am going to give this one a lot of room to run.
BITSTAMP:BTCUSDLong
by This_Guhy
9
Bitcoin "Normal" Bear Market TargetingTLDR: We have at least another 40-50% downside if the pattern holds Introduction Bitcoin and crypto has some fierce bear markets that can really affect people's psychology. To that end I think it would be helpful to show people a general pattern I have noticed and have been using to help me do my personal battle planning. Two Simple Indicators The NVT by aamonkey This version of the NVT dynamically paints zones on the NVT so you can recognize when the price of bitcoin is high or low compared to the number of transactions it is pushing through. Despite all the noise about what bitcoin is, the blockchain is a decentralized payment network and the currency of that network can either be expensive or cheap compared to the number of transactions being run on the network. When the NVT enters the red area it is a sign that a bubble is going to form and there are going to be a lot of of higher highs inbound. Once price has gotten above the upper red limit the party is about over. When it reenters the yellow band the bear market begins in earnest. Lots of trades can happen but ultimately the direction is down. Historically accumulation begins when the NVT is in the green. When the NTV starts to make its way out of the green area accumulation is broadly done and the cycle begins again. The Gaussian Channel The Gaussian channel default has a look back period of over 144, which means it is a very slow and very lagging indicator for what the average price was. So if price is at the center line of the the channel then the average price of bitcoin was roughly the same over 144 periods. Price is now below the centerline, which means that it is roughly down over the last 144 periods. When price falls out the bottom of the channel the channel turns red and we can expect a 40-50% drop. Limited Conclusions First, my conclusions are limited by the short life span of Bitcoin and the lookback periods of the indicators being used. The NVT can be used on lower time frames to find moments where the network is undervalued and therefor a buy to value investors but it still doesn't look proper on the first two years of available data. Second, there is this disturbing rising wedge formation on bitcoin as shown in purple. Since these wedges break down the majority of the time my assumption is that this one will likewise break down. That means that investors looking to use what has worked the last two cycles could be in for a nasty surprise. more indecision comes because bitcoin could have a melt up once it What I am doing and why I believe in charts and patterns. As such I am only taking shorts on crypto and have only had 3-4 long margin trades over the last year and some of them were absolute busts. One reason I became bearish is consolidation patterns did not resolve themselves bullishly or they turned out to be reversal patterns and when that happens it takes a while for the bearish energy to work its way out of the system. I am taking the portion of my paycheck that I use for crypto trading and using it to fund shorts and I don't have any crypto other than stable coins. I am going to be using my targeting on the double top pattern to stop me from being too greedy on my shorts. Once the price gets close to the 1.618 to 2 level on the fib retracement, which is near wedge support it would be reckless to short open new shorts considering a bounce would be very likely. A move from 15,000 to 35,000 is very doable with a short squeeze. Until I see a bullish pattern that is bigger than the purple rising wedge I am going to watch for the weekly NVT to go through the cycle and I don't feel like accumulating, I will wait for price to fight its way into the Gaussian channel and for the NVT to get out of the green. Here is a key point: rising wegdes that don't break down fully often were part of a channel. If I see price action finding support on the channel then that would be a larger chart pattern than the rising wedge and I can play that. Likewise the Keltner Channel and 200 week SMA have been great support before. If they appear to be working then I will look at putting on some long margin trades, but I don't see myself investing and holding crypto for a while. [b/Abnormal Bear Market The bottom of the wedge is the target for a mega bear market. This would probably mean that the Nasdaq bubble pops again and loses over 90% of its value. Commodities soar and people spend a fortune on making sure they can afford the bottom layer of Maslows Hierarchy of needs. If you don't need it for food or shelter, and it isn't addictive it will be sold off. Linked Ideas A broader view on why I am so bearish.
BNC:BLXShort
by This_Guhy
9
Bitcoin Bollinger bands, NVT show signs of weakening priceIntroduction Bitcoin is in a very confusing time right now. There are lots of bullish sentiment happening with bitcoin but technically it is looking like the bullishness is beginning to fade and the price action is beginning to look bearish. Whether this is the first sell off or bear trap and price resumes higher in a macro trend remains to be seen. This idea will be focusing on the monthly and weekly bollinger bands and the NVT, with a couple of extra indicators. Bollinger Band Analysis Bollinger bands can be great tools at various stages of the market cycle, especially when combined with other indicators to verify support and resistance. They can also cut you deep when the bollinger bands fail as you think they may act as support and resistance. Once interesting way I have tinkered with the bollinger bands over time is to compare what is going on with the weekly and monthly when it comes to the upper and lower limits. During large upside impulses you will see the weekly upper limit completely above the monthly upper limit. Not shown here, but during these impulses ups you can even see the daily bollinger band complete outside the monthly BB at times. When that happens the times are heady but the hangover will be severe. One sign the party is over is the weekly Bollinger band has completely moved back within the monthly bollinger band. The chart below will show that happened this week. The last two times the weekly bollinger band moved into the monthly bb bitcoin was in a uptrend that ended up being a bull trap and the next move was over 50% to the lower limit of the monthly bollinger band before a serious bounce. Right now that would but us at about $24k. NVT and Hash Ribbon Analysis One thing probably not on most people's radar is the NVT, in particular because most people don't use this color coded version by aamonkey. I have been looking at this on the daily and weekly timeframes to help clear up some signals and right now the NVT is acting exactly like it did last bear market's descending triangle. After a massive sell off the NVT goes green and then price rallies and the top occurs around when the NVT goes red on the daily. This doesn't work for people looking to snipe trades but does let us know broadly what is going on. The weekly NVT trend is likewise similar and something I pointed out when Bitcoin was topping. When the NVT goes above the red limit it signals the end of a bull market and severe retracements. It is only when the NVT finally passes into the green bands that price begins its recovery and never returns to those price levels. The main weakness of this analysis is we have limited history. Many bitcoin investors look to the hash ribbon and its signals to buy and sell. Generally that is a winning strategy. With all of the analysis I have done my gut is telling me that the most recent buy signal is very similar to the buy signal right before the C19 dump. BTC is in the process of basing out when the hash ribbon signals a buy and then very short uptrend occurs then a very rapid dump. That would be a very nice trend to trade due to how quickly traders could get in the money buying the dip. It is painful for holders because the capitation signal came to late to be useful. My personal hierarchy of indicators puts the NVT over the hash ribbons, especially when comparing the weekly chart and the NVT goes above the red limit and then drops into the yellow zone. I see a very high probability that the NVT has to go to green on the weekly. If you view bitcoin for what it was designed to be, which is a trustless payment network with its own native currency , then when the network is overvalued (weekly NVT in the red) you sell the currency into strength and when the network is undervalued (NVT in the green) you look to buy the network's currency during dips. Bearish Scenarios The available history on bitcoin shows that it appears to "like" descending triangles as its topping formation. There is a lot of bearish divergence to work out as well. Since 2014 BTC has formed these descending triangle the Stochastic drops from overbought and falls to oversold and price seems to settle on the monthly Keltner channel before recovery, at least with candle bodies. A repeat seems very feasible. A double top is also possible but that hasn't been bitcoins history. A bullish scenario This has become my minority position but it is what I believe those still bullish will see if price retraces as I see it happening. Both a W and a descending triangle can have a roughly equal low and I think many traders caught in a descending triangle don't see it because the are looking for a W. Likewise, people, such as myself right now, may not see a potential W forming because they think they will be getting the triangle. People looking for a repeat of 2013 will be looking for the W. The most emotionally painful scenario we could see is a symmetrical triangle. This would bet both bulls and bears keyed up and I think would result in the most people losing the most money. Closing thoughts For a while lots of people in crypto have looked to BTC to be the bellweather of the whole market and I am beginning to think that relationship is weakening more and more. I have thrashed out a system to help me determine trends and identify potential key reversals. According to that system BTCUSD has this month to go above and hold above $50,037 to clear both the monthly and MTF VSTOP x3 VSTOP. As the MVF and VSTOP very recently flipped bearish my operating assumption is the bear market just begun. Other cryptos have not shown this weakness. I am no longer comfortable thinking that weakness in BTC will drag down the broader market, and I am not comfortable thinking that a rising altcoin tide will raise bitcoin's boat. More and more I don't think we can say bitcoin is bullish, buy the market, or bitcoin is bearish, sell the market. As I mentioned in the NVT analysis section, Bitcoin is a currency on a trustless payment network. Digital gold is branding and marketing and I think those that are buying it as digital gold, no matter how smart or wealthy they are, or how many laser eyes are posted, are buying it for the wrong reason. If you view it as currency on a trustless system then you buy the currency when the network is undervalued based on your timeframe and sell it when the network is overvalued, again based on your timeframe.
BITSTAMP:BTCUSDShort
by This_Guhy
19
Relief Rally about to beginThis is an update on the indicators and concepts I have been watching for a couple of months now. I was hoping for the signal on the NVT to be apparent on the 1 day chart for an even better entry but so far that signal isn't as clear as the 2 day chart. In short, the NVT went into the green which is a position that for the last couple of years loathes to be in. As such it seems very clear that we will have a bounce from here. If yo are an accumulator you would be looking to accumulate here for the long run Perhaps not as much as you would if you see the NVT flash its buy signal on the weekly. Key Concept Major moves happen when key levels or trendlines are tested and retested. They flip from support to resisntance and back. Trendlines come back to life after months or even years after we thought they were not needed any more. The key thing I will be evaluating is how the price action will act at the purple trendline. Due to my current bearish bias It hink that it will act bearishly as resistance. This price action is a lot flatter than the top 3 and more resembles top 2. Either way the plays would be the same. Once of the levels I want to see flip from resistance to support are the fib log growth curves. I have left in just the levels aroung 50% to show how important the levels are. I expect the light blue level to act as resistance here shortly. The plays If you don't like the risk at shorting you are going to be watching the trendlines for that sign of rejection before you dump your bags. Bull traps are the last chance for bag holders who missed the first dump to exit their positions. A pateint trader or investor will be evaluationg to see if the trendline can be beaten as resistance and if the price action actually hops on top of the purple trendline then the crisis is averted. But if both the purple and orange trendlines act as resistance then it is very bad news bears. If you are a trader and have the risk and stress apetite you will be looking to long the move into the bulltrap and then short the next dump. This requires some effort and ability and isn't recommended for the general trading population. Coming up shortly will be the sister post for the day looking at volume and ichi-moku clouds. This post is tagged neutral because you could use it to go long and short depending on your preference
BITSTAMP:BTCUSD
by This_Guhy
8
NVT by aamonkey (and my charting) suggest bull trap lower downI have been looking for the bull trap bounce for a while now and I have been looking to use aamonkey's version of the NVT as a way of helping steady my hands and clarify my thinking. The blue measured move show historical losses of highs to the top of the orange box and that orange box has been a serious area of consolidation in the past before the final low is reached. Very clearly we have some distance to transverse if we reach historic targets based on this pattern. The orange box shows where a quick area of consolidation has lead to a bounce on BTC before. The yellow box is where the bull trap has topped based on historic behavior before. Manipulate the chart, squint your eyes, it is all there. Here is our daily chart all kindz of zoomed in. This lets us look more closely at the all time highs and it lets us evaluate the price action that I suggest will act as support. We can also see that the NVT has not flashed green yet on the daily. Key point to remember is it flashing green on the daily is not a dummy buy signal. It just means that the network, roughly is undervalued for the number of transactions it is processing. It is just telling us that this is where long term investors could be happy to begin the long accumulation process. I intend to update this as needed as time goes on. It is going to be very stressful and fortunes will be made and lost on the next couple of days to weeks and all moves during this time are higher risk than normal, and that normal is already very high risk for crypto. The linked charts will show my recent streak of good luck with charting that could break at any time as well as some other attempts of forecasting future moves. This dump could be worse than others, so we don't know how this is going to go.
BITSTAMP:BTCUSDShort
by This_Guhy
9
BTCUSD: Aiming in by using Data On Previous EngagementsIntroduction Bitcoin continues to take a beating and I am producing different styles of charts to reach different styles of investors and traders, hoping to show them something in a system they recognize. I have done divergence on indicators, I have use bollinger bands, I have done volume analysis, everything I can to help. This is to help out the moving averages traders. See my linked ideas if you want some more confirmation. This takes a wide shot of the 100, 200, and 400 daily EMAS because they have historically been shown to be very useful in these situations. And because I never like to pull a trigger on patterns or Moving averages alone (I usually like divergences to back up my charting) I have an indicator that has proved useful to show where BTC is a value buy. The NVT is network value divided by transactions and due to the color bands provided by aamonkey we can see generally where NTV is expensive and where it is cheap. Current Scenario As it stands price action is in a triangle and hanging onto the 100 EMA and very well maybe consolidating for its next leg down. The charting does permit some more sideways action but with the totality of the macro environment and the negativity in the news I think sentiment is going to be enough that hands get weak and look to buy a dip. We have a lot of chances to swing trade BTC over the next couple of months, and that means a lot of chances to get reck'd if you forget the bigger picture. And part of that bigger picture is to not forget the orange and purple trendlines. In 2018 the purple trendline acted as a slide while price action took months to form a falling wedge and if you thought early on that previous resistance was now support your gains would have slid down along with price for months until you saw the wedge form.
BITSTAMP:BTCUSDShort
by This_Guhy
2
Bitcoin: Big Alarm Bells about to be rung (VSTOP, NTV and BB)There is a lot in the chart but we can go bullet by bullet. I am using the three day intra-week setting but will look at other time frames as we dig in. VSTOP - A way of setting stops using the Average True Range, a measure of volatility to help chart trends. I have decided to only show the VSTOP acting as resistance to simply the chart. VVSTOP MTF - A multiple time frame VSTOP set to three times the default setting. In conjunction with the VSTOP it can show dynamic support and resistance, For visibility I have tweaked the charts to have the flag indicating the bullish MTF was breached show high on the chart. A black dot within a bulb occurs when the MTVSTOP is breached and then we close a handle below to confirm the break. Investigation: In 2017 there was a massive run up on BTC and at a high we had the VSTOP present bearishly and in short order the 20 period SMA was breached and the MTF VSTOP was breached and confirmed in short order and a massive bear market ensued. We see we are very close to having all three conditions met currently. We have 16 hours to close the candle and if we have flipped the VSTOP it will be another 3 days to get a black dot in the bulb and we start printing bearish MTF. 1 Week Chart This chart is a bit wonky. The log Growth curves are used to contain the vast majority of price action and the bolded lines show a lot of significance over the years. In part, if the are breached we can expect to transverse from one to the other rather quickly and either consolidate or proceed to the baseline of the upper limit. I altered the MACD to only show the histogram because to show the crosses on the log chart is basically impossible, so we can just focus on the histogram. The blue boxes show where the MACD crossed the signal and therefor the histogram flipped from green and positive and red and negative. But that is not the only condition for a blue box. The NVT had to transition from Red into Yellow signaling lower network value/transactions. Historically those conditions being met are devastating for BTC price. Now this chart is BLX and so it is a day behind. Here is our current chart. The MACD is clearly red and the bearish cross of the MACD and signal is upon us. We have not closed, but there is a breach of the log growth channel of interest. Another look at the weekly chart with the bollinger band in blue and the monthly bollinger band in green. This is simple, if we slip into the monthly bollinger band with a weekly MACD cross we are in a bear market. You can take your shorts at either the baseline of the weekly chart or at the top of the monthly Bollinger band. Here is a similar circumstance in 2013 and 2014. We have the MACD cross and slip into the monthly BB and we have a bear market. Also, the uptrend has been marked by falling volume and RSI going into this MACD cross In summation 3 day VSTOP bearish About to convert the 3d MTF VSTOP to bearish Broke the 3d 20SMA Weekly NVT and MACD combo look like hell Weekly and Monthly Bollinger and MACD combo bands look like hell Volume and is declining with rising price very suggested of the end of an uptrend on the weekly timeframe. Me Personally I am tethering up what I can except what I need to maintain some shorts. I had my some very long calls reach target and was willing to deal with the normal pull backs in crypto but at this point I cannot risk the upcoming volatility if I don't think we can return to these levels in a couple months or maybe even a year. If I am wrong I miss some gains till I see more strength in the charts. Oh well.
BITSTAMP:BTCUSDShort
by This_Guhy
2
Strong buying Growth Curve 61.8 Lvl and Bollinger Band BaseTL:DR It appears we reached a local low Everything Else Greetings! I have been watching the Log Growth Curve for a while now and identified the 61.8 level as one of the more important levels when it cones to deterring the probable future of bitcoin. In previous markets cycles breaking the level has been indicated that bitcoin would be having a blow off top, but on each market cycle it seems bitcoin needs to spend more and more time to break through the level, as well as consolidate around the level. I continue to believe that once we get past this level onto the next level things are going berserk. After the Pi cycle top indicator flashed we had a ferocious dump over the weekend. Where did we fall? Right to the level I identified as crucial months ago. Even better, we only were below the level by 1% and less than 3 minutes. I am personally in other cryptos as I think they have more upside but BTC is the benchmark for the whole crypto market. And the overall trend for bitcoin is bullish. Some of the best times to buy are when the price is out of the base of the daily bollinger bands. To narrow it down to a realistic look at how we can recover I see it very likely that we get something resembling the last dump out of the daily bollinger band. Very probably we get a similar recovery with interactions around the blue trendline flipping from resistance to support. We can chop down here for a couple of days or longer. Sidenote: I don't really buy this argument that it was because a power outage in China affecting the hash rate, unless the miners somehow coordinated to have their own power cut so they could time selling the market and rotate their bitcoin stores out of bitcoin into something else with more upside. It just so happened that the outage happened at the crux of a rising wedge after the pi cylce crossed. Who really believes the news these days anyway? /endsidenote
BITSTAMP:BTCUSDLong
by This_Guhy
16
BTC: Pi Cycle, Log Growth, NVT and OBV primedGreetings! Bitcoin looks like it is primed for a final leg of its parabolic move based on a series of indicators which would suggest that alts will be topping in the months afterwards. Log Growth Curves by quantadelic These curves were based on calculations made in October of 2019 and so far have done a really good job of informing users on price action. The script is available but since I am a pine muggle I don't know how to update the data. None-the-less I have identified the fib-channels to either side of the 50% baseline as especially important for suggesting when big moves are going to occur. The purple box shows when the 61.8 level is exceeded and then tested as support BTC price action is right now in the process of confirming the level as support. It looks clearer on the weekly chart on the 3 day chart below. A view of the BLX ticker shows a wider view and shows that rejections at the 61.8 level have happened and been the cause of a major contraction. Pi Cycle Created by Philip Swift and popularized by www.lookintobitcoin.com Per Look Into Bitcoin The pi cycle top indicator goes back to April of 2019 and so it is another backwards looking indicator we are trying to use for the next top. A preliminary look at the main chart shows that once the 61.8 level is confirmed as support then shortly thereafter the pi-cylce flashes its top. The convergence of the two EMAs likewise looks very similar and so once again I think we will be flashing a topping signal in the next 4-6 weeks. On Balance Volume (with EMAs) By Mattzab This is one of my favorite indicators and I have pared it down to just the On Balance Volume and the 100 EMA. At our last market top we saw that OBV started to trend sideways and oscillate around the 100 EMA. The most important thing is the top of the box that was resistance to the OBV but price action was trending upward and setting higher highs. This technical double top sets up bearish divergence and is generally not a good thing. This time around we don't see the OBV oscillating around the 100 EMA and the resistance lasted longer the last go around. We do see two contacts on the top of the current box and I suspect when we get our break out we will again have a blow off top. The higher low on the OBV looks like an ascending triangle, but I am not sure we should be closing our positions just because the OBV reached its target. NVT by aamonkey There are a couple of NVTs out there, but I particularly like this one. It works on both the daily and weekly depending on your choice of timeframe and how much you want to be babying your trade. A look at our last top shows we can go from the middle of the yellow zone to the red zone where the sell signals occur. The weekly chart shows that we are flirting with eloping from the red zone of the ribbon which is why I will definitely not be holding on much longer should the daily NVT flash red. By the time the the weekly NVT falls into the yellow zone the bear trap is near complete. Which is fine if you used the green zone as a buy signal. Stock to Flow By yomofoV Historically price action has had lots of over-performance on the stock to flow but that over-performance has been reduced time over time. I myself have hoped for massive over-performance but I just don't see it happening this time around. This final bit is important. Below in blue is the weekly bollinger band top and baseline. The green is the TOP of the monthly BB. The bottoms are not shown because parabolic moves distort the bottom of the chart as the lower edge goes below zero. The baseline of the weekly is roughly the top of the monthly BB. Trying to buy the dip under these conditions is very risky because you could be looking for a bounce of the 20 week SMA and get a fist full of losses. One way you will be able to tell that the next bear season is upon us is the monthly bollinger bands assert themselves. We don't know the day or the hour but mathematically it has to happen as 95% of the price actin on the monthly chart has to occur within the monthly BB. My personal Battle Plan I am going to grab as much gains as I can in my preferred alts. I think that Dapp coins will top after BTC and then the currency coins, like Bitcoin Cash, Monero, Dash, etc will top after the Dapps but that is intuition right now. There are are going to be some honeybadgers out there like Link was the last bear market which was basically done bottoming out in months and just ravaged market share but we won't know what the honeybadgers are until they start to ravage, and most people will be in disbelief. An appeal If you find this worthwhile show it to some crypto-muggles you may know which may be unprepared for the upcoming move as well as the upcoming bear market. BTC loses 80% of its value all the times and a lot of the tools shown here can stop our friends from losing a lot of money if they are looking for a break of $100k as a buy signal when some of these other indicators are flashing sell signals.
BITSTAMP:BTCUSDLong
by This_Guhy
2
BTCUSD I am standing on my long callsTL:DR THE NEXT THREE MONTHS WILL BE CRAZY A couple of weeks ago I posted this screenshot as part of a larger post that will be in my linked post. During the last couple of weeks a lot of the daily or multi-daily YouTube crypto posters have gyrated all over the post over going long or short and I have been silent on BTC while posting bullish posts on other assets. Why have I not posted on BTC? Because I stand on my call and don't see the need to crap all over TV spamming myself. We are not going below the lower limit of wave 4 until we hit the upper limits of the log growth curves. For legal reasons that isn't financial advice you can take to the banks or stay poor. I continue to think we are within the green circles and will experience maddening gains over the next several months. There is also the pi-cycle which has a lot of esteem for predicting tops within a few days on bitcoin (and XRPUSD) and we have not flashed a top signal yet. There are several NVT (Network Value Transactions to volume) visualizations and I like this one by aamonkey for use on the daily chart (and nice color pallet!) and we are not yet at a sell signal. As I think BTC will go up I think alts will over-perform. I like link and monero but you could probably throw some cash into any legit project and get some money. WAAGTMI.
COINBASE:BTCUSDLong
by This_Guhy
2
Are you brave?It appears we have once again peaked on the NVT Signal indicator. As you can see by the 100% strike rate, we are nearing a top. Bitcoin's price, as of publishing, is within 10% of a new ATH. NVT Ratio was created as an alternative to the traditional P/E Ratio that stocks have. NVT Signal is a derivation of NVT Ratio, and performs better than its predecessor. What NVT Signal processes is bitcoin's market capitalization divided by a 3 month moving average of daily transaction revenue. What you end up with is a strangely accurate top/bottom indicator that does not utilize price directly. Conceptually, under/overvaluation can be attributed to why it mirrors 'tops' and 'bottoms'. This means NVT Signal is less related to price momentum and more related to cultivating and culling profit, a cyclical process similar to harvesting seasons. Now it's time to cull. So, how brave are you? Information on NVT: charts.woobull.com Information on fees and Replace-by-fee: en.bitcoin.it en.bitcoin.it The indicator:
BITSTAMP:BTCUSDShort
by NeoButane
27
Have We Actually Hit the Bottom Yet?Have we hit the bottom yet? Weekly 200MA which many people use point towards a double bottom test that we have had, yet other indicators which I believe are more useful in showing accumulation zones show that March's drop to 4k was not actually a second accumulation zone. You can check out this chart I have uploaded.... ibb.co CVDD and Balanced Price are really good indicators showing us where the market has bottomed. It does not appear to show a second accumulation bottom which the weekly 200MA does indeed show. Staying in the 4.2-4.5k zone for a short period of time I believe will be the true bottom.
BITFINEX:BTCUSD
by Danimal69
3