07/11/2018/09:00CET
The crypto market is showing green shoots of life out of the quagmire of dissolution.
I have not posted in the last week or so because the crypto markets were simply not doing much at all!
i.e. volatility had reached such an unseen low level that there was scant little TA that could be done. We were all waiting.
But then again we have been waiting for some weeks and months now as well.
Though to be honest it has been this nervous wait to see if the ice will crack underfoot at the 6k mark for #btc
Together with that there were a lot of other things in my world that needed attention.
Markets
Let's take a look at the majors and do a little TA...
BTC
Bitcoin has shown steady growth over the last week or so. We trade just north of 6500 at the moment and sentiment is positive, though still tentative. We have broken through the 21 day ema with some gusto - a strong sign.
Most traders who have been in the crypto markets long enough know that the whales can still smash the price down quite hard in this still quite illiquid market, this specter looms. In fact, and as I have stated many a time, we need liquidity! We need to see signs of new fresh funds flowing into the crypto space to see organic price appreciation.
It is a bit of a 'chicken and egg' case here. Without some crazy multi digit gains for a few days, the news cycles will continue to ignore BTC and the crytpo market in general. (unless there is some bad news to FUD about).
And only when we get this news out will the general public get crypto fever again and pile in driving the price up again.
This will lead to a parabolic again! It must simply because it is human nature that drives it and human nature when counted over a huge population is quite predictable.
I have added to the chart the obvious support (green) and resistance (red) levels. The thicker, the more significant.
6800 is definitely our next hurdle. We do have the 100 daily sma before that but I think this will not offer the resistance that we will have at the 200sma. After that, the next pause will be seen at 7400
As a note to liquidity, there are more and more whispers flittering out from insiders telling us that OTC market volume is growing fast. This is hidden liquidity we do not see on exchanges. Beware though, these holders will probably keep their coins on the sidelines till the next peak of the parabola to dump the markets.
There is a chart to show here that is quite comforting...
This is a weekly log chart of #bitcoin on the #Bitstamp exchange. It has the longest USD trading pair history and is a good place to see a long trend of BTC.
Here you can see that we are about to kiss off the log trendline again. I will let you salivate and wet your pants as you extend a new wave curve onto this chart and see where the next peak will land.
Another way to do a long term macro TA calculation is this...
- Top to Bottom - 2013-2015 BTC when from 1,141 to 152, a retracement of 87%
- Bottom to Top - 2018-2017 BTC when from 152 to 19,666, a gain of 11,640%
- Top to Bottom* - 2017-2018 BTC when from 19,666 to 5,780, a retracement of 70% [*assumed bottom]
- Bottom to Top - 2018-20xx BTC goes from 5,780 to 540,580, a gain of 9,370%** [**assumed gain proportionally applied from last run up but correcting with the lower retracement (70 vs 87%]
At this point 540,580 * 21,000,000 = a market cap of BTC at about 11Trill. USD. (but a McDonalds BigMac may cost 200.- USD by then as well!)
I know plenty of pundits have made such calculations and published them. So I have succumbed and jumped on the bandwagon. Sorry for nudging the FOMO train.
There is a caveat though, and those of you who read my analysis will know that I never only look at the bright side
If you take a look at the most recent week or so of green action, the you will see that this blip can easily blend into all the other false breakouts we have had over the past 8+ months. We are not out of the woods yet guys!
I think if we get a breakdown, it will be a deliberate whale dump. It will be there to get one more (or the last) low entry point for BTC, or to say another way, the last shakeout of the dumb money. But I think those of you who are sitting on losses and are still here, you will sweat it out even if we get a spike down to explore sub 5800 levels. If it were to happen, it would be short lived and I would definitely look to snag some BTC at that price. Dip buyers would swarm.
Now let's look at others in the cryptoverse...
ETH
At press time #Ether trades at 221 usd after a nice bump up over its 21 day ema. The next hurdle for Ether is at the 250-255 level. Here we see the 100 dsma and a significant historic support/resistance level. Again volumes are disappointing.
LTC
At press time we trade at 56 usd, a very depressing level for anyone who is a Litecoin fanboy. LTC is basically trading at the same price as it was exactly a year ago. I see that the market structure for LTC long term is the 50 usd mark. This is the price to watch if the market turns sour.
On the upside, we see resistance at the 100dsma which is just overhead at 58, and then the support/resistance level 65 usd.
EOS
At press time we trade at 5.76usd and we have gotten our leg up and over the 21dema, and the 50 and 100 dsma indicators. Looks like the 50dsma will cross the 100 to the upside as well. All bullish indicators.
The 200dsma is still way overhead at the 8.60 level. Our next challenge is the support/resistance level at 6.80 usd. Its not so far away either, just 1 usd.
ADA
#Cardano is trading at just under 0.08 usd at press time. It had bottomed out at just north of 0.06 just less than a month ago. It is holding a healthy trend, as most coins are at the momont and will likely feel resistance at the support/resistance level of 0.09. The next most obvious support/resistance level is a whopping 100% away at 0.18.
Lets keep in mind that #ADA topped north of 1.10!
XRP
At press time we trade at almost 0.54 usd. XPR had bottomed out at almost 0.25 just 2 months ago and staged an impressive rally in mid sept of which it has managed to retain most of its gain, though after a 50+% retracement of that rally. In that mean time XRP had managed to create a new support/resistance level at 0.47 and now builds on it to the upside.
XRP is one of the few coins out there that has managed to get over on top of all its moving averages, even though the 200dsma is still on top. As far as TA goes, this one looks nice for swing trading. Volumes also look like they could have now bottomed out and are showing signs of reversal.
The next significant support/resistance level I see in the charts is off this image at 0.92
BCH
I usually do not cover #BCH for many reasons which I will not go into here. I want to keep things clean and stick to TA. So ironically I show the BCH chart now because news has overtaken any TA and I wanted to show you guys an example of useless TA.
Sure I could find all sorts of correlations to historic price levels and divine reversal points, etc... ad infinitum.
It would come to naught because speculators simply want to get free coins in the coming hard fork. This emotion has totally drowned out TA of any value.
News
BCH hardfork
To continue with BCH here for a moment.
So we are back into forkville. I can completely see the argument of the mainstream economists who use the fact that bitcoin can be forked at any time to dispel the claim that there is a limited supply of tokens. I do believe though that this is a feature and not a fault. And that they are not the same tokens whose number is expanding, they are new and not interchangeable with the original.
But in general, I would like to see hard forks being limited to serious technical issues and not hide behind faux technical pretexts to create an airdrop.
So here we go again!
I think when the dust settles, we will get a winner and a loser. Either BCH(ABC) or BCH(BSV) will be adopted. Not cleanly though. Just like when btc hard forked to create bch, it was trading in the 2500 usd range and bch traded at about 10% of that in the subsequent days. Today we also respect this 1:10 ratio between btc and bch still, though I know this ratio is volatile.
Putting price aside and considering the personalities at play here, there will be entertaining fireworks and a lot of cringe worthy videos in the aftermath. In general a pair of poor posterchildren for cryptos squabbling over a broken replica toy.
Very mature and confidence boosting (sarc).
ETH vs EOS paper
I have not read the paper but I listened to Ivan on Tech doing a nice breakdown. You can watch it here. IMHO I think this kind of competition between blockchains is healthy and unfortunate. I know this sounds quite schizophrenic, but it is how I feel. I know that the free market is cruel and heartless, but is better that cartels and central control. That is why we are in this space, so we had better put up with it.
OTC markets
I have been hearing more and more chatter on the internet about OTC markets for BTC and other majors in the cryptosphere. It is not a surprise. If a high networth individual or an institutional player wanting to wade into the crypto world without suffering from 'price slippage' cannot go onto open exchanges like Bitstamp, or Bitfinex. Can you imagine what an order to buy even 20+ btc will do to prices, let alone 200btc or more. Let's remember these are chicken feed sums of money for institutions.
Direct deals with whales or with large miner operations is their only real option at the moment.
I have prepared a few articles to read about this here.
- https://www.forbes.com/.. ../uncharted-bitcoin-otc-markets-gear-up-for-institutional-inflows
- https://www.newsbtc.com/.. ../big-institutional-investors-are-buying-large-amounts-of-bitcoin-in-otc-market/
*https://coingape.com/no-more-waiting-for-bitcoin-etf/
As always guys, leave comments, have fun and trade safe.