Bitcoin, forever insane.
in my last chart I offered my insight into a potential selling exhaustion episode. Unfortunately I was wrong, and China news ended up being not only true, but more immediate than expected, fueling massive sell-off. The mid-long term trend was already bearish so there it was definitely easy to fuel the selling. Technically here is what I'm seeing.
neutral:
1. The break of the rsi divergence, as well as support in the 380-400 breaking might be signaling either that we have capitulated already or that there is still more selling left to be had. More of the chart needs to develop to see if support is truly broken.
2. the deviation between 50 and 200 are no longer at extremes and have converged a bit, although are still pretty far away.
3. It has been 18 days since the dive point at 585~ and the local bottom has been at a 41% decline. That is a pretty massive move even for bit coin considering the amount sell offs have been rampant and extreme. Will it continue?
4. Bitcoin media mentions have been very low as of late, whether that might signal the beginning of a stealth phase or that bitcoin goes the way of the segway remains to be seen.
Long-bias
1. selling and buying behavior in this last local bottom was extreme. the selling and subsequent bounce on a percentage basis have been the highest since gox incident before it. emotional periods like this are always ripe for trend reversals.
2. Margin data on Bitfinex is signaling possible contrarian ideas. Usd swaps are at a local low and usd borrowing rates are also low. At the same time Bitcoins being lent out to short has reach all time highs.
Short bias
1. The trend is still bearish. This is very important. Remember the trend is your friend. Shorting run ups has been proven to be profitable as of late.
2. It is unclear where the money for the next big wave or push will/can come from. I know this is very vague-sounding, but as it stands now, and for the forseeable future, bitcoin it still an experiment and the price has been largely driven up by speculators and people thinking they will become instantly rich by investing. The longer it takes for something to come around and pump rice the lower we can continue to go.
Conclusion: Do nothing. If you MUST do something, bet on the trend (short). If you believe in bitcoin and like to establish big position, Consider going long at your own risk, but remember you are betting against the trend if you do so.
neutral:
1. The break of the rsi divergence, as well as support in the 380-400 breaking might be signaling either that we have capitulated already or that there is still more selling left to be had. More of the chart needs to develop to see if support is truly broken.
2. the deviation between 50 and 200 are no longer at extremes and have converged a bit, although are still pretty far away.
3. It has been 18 days since the dive point at 585~ and the local bottom has been at a 41% decline. That is a pretty massive move even for bit coin considering the amount sell offs have been rampant and extreme. Will it continue?
4. Bitcoin media mentions have been very low as of late, whether that might signal the beginning of a stealth phase or that bitcoin goes the way of the segway remains to be seen.
Long-bias
1. selling and buying behavior in this last local bottom was extreme. the selling and subsequent bounce on a percentage basis have been the highest since gox incident before it. emotional periods like this are always ripe for trend reversals.
2. Margin data on Bitfinex is signaling possible contrarian ideas. Usd swaps are at a local low and usd borrowing rates are also low. At the same time Bitcoins being lent out to short has reach all time highs.
Short bias
1. The trend is still bearish. This is very important. Remember the trend is your friend. Shorting run ups has been proven to be profitable as of late.
2. It is unclear where the money for the next big wave or push will/can come from. I know this is very vague-sounding, but as it stands now, and for the forseeable future, bitcoin it still an experiment and the price has been largely driven up by speculators and people thinking they will become instantly rich by investing. The longer it takes for something to come around and pump rice the lower we can continue to go.
Conclusion: Do nothing. If you MUST do something, bet on the trend (short). If you believe in bitcoin and like to establish big position, Consider going long at your own risk, but remember you are betting against the trend if you do so.
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