By now, price has wiped out the 2 month timeframe range expansion stop loss area, basically retesting the yearly open price. People are now buying into YET another 'technical analysis' excuse for NOT selling and or buying into it on margin once again. This will keep going until the market bottoms. The reason bear markets are so annoying to trade is this, people keep buying on the way down, this is textbook as per Livermore: 'manipulators unload their stash after the top on the way down'.
Fundamentals have forced chinese miners to unload coins to relocate their mining operations outside of China, this won't end anytime soon I suppose, and people have been destroyed trying to buy all the different technical excuses to date (moving averages of different periods, Wyckoff spring, wedge breakout retest, double, triple bottoms, etc.) You name it, people remain bullish on the way down, which is completely negative for price in the long term, this is called confidence in loss, and it is a sign of continuation to the downside over time, complacency at its finest.
Without the GBTC premium, arbitrage players no longer were absorbing all new mined coins, and helping reduce available supply at exchanges, thus increasing the slippage on new big OTC purchases, which helped cause the bubble from 10k to 64k. The 'corporate treasury' trend is also over, since the last batch of institutional OTC buyers got destroyed after the Canada ETF came out and the GBTC premium disappeared. This was until then, a perfect self reinforced trend as described by George Soros in his book: 'Alchemy of finance'.
Watch for reaction to the area below, keep an eye on sentiment, wait for maybe some big cue like Michael Saylor being forced out of his $BTC bag, and then we can go long. Trading the decline will be tremendously hard and annoying, it just isn't worth it.
Stay safe out there,
Cheers.
Ivan Labrie.
Fundamentals have forced chinese miners to unload coins to relocate their mining operations outside of China, this won't end anytime soon I suppose, and people have been destroyed trying to buy all the different technical excuses to date (moving averages of different periods, Wyckoff spring, wedge breakout retest, double, triple bottoms, etc.) You name it, people remain bullish on the way down, which is completely negative for price in the long term, this is called confidence in loss, and it is a sign of continuation to the downside over time, complacency at its finest.
Without the GBTC premium, arbitrage players no longer were absorbing all new mined coins, and helping reduce available supply at exchanges, thus increasing the slippage on new big OTC purchases, which helped cause the bubble from 10k to 64k. The 'corporate treasury' trend is also over, since the last batch of institutional OTC buyers got destroyed after the Canada ETF came out and the GBTC premium disappeared. This was until then, a perfect self reinforced trend as described by George Soros in his book: 'Alchemy of finance'.
Watch for reaction to the area below, keep an eye on sentiment, wait for maybe some big cue like Michael Saylor being forced out of his $BTC bag, and then we can go long. Trading the decline will be tremendously hard and annoying, it just isn't worth it.
Stay safe out there,
Cheers.
Ivan Labrie.
הערה:
Big shorts showed up once again at Finex, the 'Wyckoff Spring' weak longs might get beaten into a pulp if there is follow through here. Daily timeframe data isn't appropriate to capture the decline anymore, but it is good to show the news event related key support and resistance levels.
Weekly might confirm a bearish signal soon, 3-day timeframe is bearish currently, and implies a drop towards 22-25k at least, in line with the $ETHUSD chart which also is bearish in the weekly and daily (and the same is true of $ALTPERP)
Big shorts showed up once again at Finex, the 'Wyckoff Spring' weak longs might get beaten into a pulp if there is follow through here. Daily timeframe data isn't appropriate to capture the decline anymore, but it is good to show the news event related key support and resistance levels.
Weekly might confirm a bearish signal soon, 3-day timeframe is bearish currently, and implies a drop towards 22-25k at least, in line with the $ETHUSD chart which also is bearish in the weekly and daily (and the same is true of $ALTPERP)
הערה:
Finex shorts covered during the weekend and now we see some relief rallying, daily indicates this can tag 39k, buyers are seeing an obvious trend line break again, they all fomo in today, and might run out of ammo shortly after. Daily implies 4 more days of rallying towards 39k are possible. If not hitting that in time it will break down. If it breaks under today's open, it will break down.
All of these swings are tradeable in lower timeframes but risky, as you can get taken out once it breaks out of the range. Personally, I rather not trade this unless very skilled, or using automation with a proven short term range trading strategy. I'd suggest most people to not fomo into buying, if anything short the top of the range small.
הערה:
Looks like the upside is toast, new bearish signal:
Down until July 29th, potentially, if not moving back above the recent highs.
הערה:
הערה:
Interesting observation:
(people overreact to USDCNY rallies, after they top, and fomo into BTC in China)
We should wait for the next rally in the dollar vs the yuan to start in monthly scale, to look for a bottom in Bitcoin perhaps. Certainly an interesting pattern, but not sure if it will remain valid after the big migration of hash rate out of China taking place now. Last two long term rallies bottomed after a 5 month low was in place in the $USDCNY pair, and accelerated after the Yuan started to regain strength, topping out when the Yuan uptrends ended in both cases.
We should wait for the next rally in the dollar vs the yuan to start in monthly scale, to look for a bottom in Bitcoin perhaps. Certainly an interesting pattern, but not sure if it will remain valid after the big migration of hash rate out of China taking place now. Last two long term rallies bottomed after a 5 month low was in place in the $USDCNY pair, and accelerated after the Yuan started to regain strength, topping out when the Yuan uptrends ended in both cases.
הערה:
הערה:
(sorry, 2 month timeframe, so, 10 month low in $USDCNY, and bearish T@M signal in $USDCNY)
הערה:
I'm adding some more remarks regarding the 2013 super cycle theory and why I think it won't happen:
Cycle duration has increased, the same as volatility has decreased with subsequent halving cycles.
As per the methodology rules I use, the correct timeframe to determine trend duration and targets is 2 months per bar now. It used to be doable with monthly bars (like in the chart above)
The bear cycle can't be so short anymore.
(and judging by sentiment and the extent of the decline since hitting the long term target #1 at 57k, I am confident we saw the long term top of this bull cycle)
This is in reference to the chart above showing $BLX data since inception, as per @starrynight's question in the comments below.
Cycle duration has increased, the same as volatility has decreased with subsequent halving cycles.
As per the methodology rules I use, the correct timeframe to determine trend duration and targets is 2 months per bar now. It used to be doable with monthly bars (like in the chart above)
The bear cycle can't be so short anymore.
(and judging by sentiment and the extent of the decline since hitting the long term target #1 at 57k, I am confident we saw the long term top of this bull cycle)
This is in reference to the chart above showing $BLX data since inception, as per @starrynight's question in the comments below.
הערה:
$BTCUSD looks really, really damn bad now.
I think it can trigger the weekly signal this week and break out of the range in a big way now.
I think the time has come, if this hits the dashed line level below during this week, the down trend will be confirmed.
I think it can trigger the weekly signal this week and break out of the range in a big way now.
I think the time has come, if this hits the dashed line level below during this week, the down trend will be confirmed.
הערה:
Signal triggered at Coinbase only for now, $USDTUSD moved down on high volume, and $BTCUSDT at Binance is not yet as low as Coinbase price. Maybe US whales are selling there, driving it below the other exchanges...US whales were the drivers of a lot of the bull run before. And US people with stimulus checks were the drivers of the late stage altcoin season move. Food for thought, this down trend might have legs now, finally.
הערה:
Signal confirmed everywhere...Regulatory risks are substantial, same as the miner exodus forcing miners to relocate and sell spot. Interest from institutions subsided, there is more supply than demand now. Mining is quite profitable still...
הערה:
Interestingly, peak to trough and trough to next peak timing has matched so far...
If it is the case again, we are going to bottom around 85.5% down from the top, by March-April 2022, at 9403.32...
If it is the case again, we are going to bottom around 85.5% down from the top, by March-April 2022, at 9403.32...
הערה:
Two possible scenarios here...First one doesn't seem too likely imo:
2nd one is what I would expect:
2nd one is what I would expect:
הערה:
Check out the chinese financials chart compared to $BTCUSD here:
It seems $BTCUSD is rolling over in tandem with Chinese stocks, reacted sooner than US reflation plays, which had some lag.
It seems $BTCUSD is rolling over in tandem with Chinese stocks, reacted sooner than US reflation plays, which had some lag.
הערה:
Last short signal me and my clients took panned out nicely, we got out before the B word event, now waiting. Market is long term bearish, but, for now, we have to deal with some buying on these declines when it gets oversold. I'll wait for short term buyers to be exhausted to short again.
A simple thing is to not trade and hold cash, but some profits can be extracted from these swings until the market bottoms by next year or so.
Last short signal me and my clients took panned out nicely, we got out before the B word event, now waiting. Market is long term bearish, but, for now, we have to deal with some buying on these declines when it gets oversold. I'll wait for short term buyers to be exhausted to short again.
A simple thing is to not trade and hold cash, but some profits can be extracted from these swings until the market bottoms by next year or so.
הערה:
A few interesting things:
Perhaps 30k is the new 6k during 2018, we can trade in and out, and capture swings up and down probably best to do that than marry a hodl thesis. It's too early to call bottom imo, if we saw the bull market top, which I think we did.
Maybe ranges are smaller now, so we should make the volatility of the fractal smaller perhaps...so far previous bear markets bottomed at the lowest volume area between the previous bull market mode and the top, this time, we already are close to that area (light yellow boxes that go from 2018 to 2022 in the chart below). One such level was 42k, which was where everyone wanted to buy and couldn't on the way up, so they bought the first retest of it, and price crashed further and liquidated everyone on leverage. The next level is around 25k. Perhaps it bottoms there again, or it breaks it and goes much lower than previous ATH, back to the mode near 9400, which would be in line with average corrections during a bear market, as per the 2014 bear market, and 2018 bear market. So either fall short of 20k retest at the low or go beyond it. A higher bottom than consensus view is possible certainly, a bottom now, imo, not likely at all.
Chart with copies of the 2014 and 2018 bear markets, without adjusting to today's change in volatility, referenced above.
Perhaps 30k is the new 6k during 2018, we can trade in and out, and capture swings up and down probably best to do that than marry a hodl thesis. It's too early to call bottom imo, if we saw the bull market top, which I think we did.
Maybe ranges are smaller now, so we should make the volatility of the fractal smaller perhaps...so far previous bear markets bottomed at the lowest volume area between the previous bull market mode and the top, this time, we already are close to that area (light yellow boxes that go from 2018 to 2022 in the chart below). One such level was 42k, which was where everyone wanted to buy and couldn't on the way up, so they bought the first retest of it, and price crashed further and liquidated everyone on leverage. The next level is around 25k. Perhaps it bottoms there again, or it breaks it and goes much lower than previous ATH, back to the mode near 9400, which would be in line with average corrections during a bear market, as per the 2014 bear market, and 2018 bear market. So either fall short of 20k retest at the low or go beyond it. A higher bottom than consensus view is possible certainly, a bottom now, imo, not likely at all.
הערה:
Last weekly down trend is invalidated, a short squeeze happened and price is tracing a daily uptrend now. I did point out I was covering shorts before this run up, but didn't go long. The overall thesis from fundamentals, macro, and sentiment remains the same, long term technical view is the same, only that this squeeze drove price higher, people regained confidence with Elon Musk making some positive remarks about $Bitcoin in the B Word event, and overnight, margin requirements changed at Binance without notice...add to that, a big short position from a low price, and the Amazon rumor and bam, we had a big short squeeze worth $900m.
I don't know if this will cause an enduring move, most likely it won't since everyone remains just as bullish as before the top. Historically, people have never been so confident of a recovery, at the end of a bear market. And never were so confident on the way up during a bull market either. We had a wall of worry effect and a self reinforced trend before, this is gone. Amazon rumor, even if true, is not a source of new demand, unlike the Paypal allowing people to buy BTC with their balance news...It is a new way to spend existing already purchased coins. So, a way to sell, not a new way to buy creating new demand.
My bearish view remains the same, only that short term we have some possibility of upside here. Weekly invalidation can take price to $63982.70 as an absolutely best case for bulls, if so, the bearish thesis is wrong, or the way the bear market unfolds is WAY more sideways than down. I EXTREMELY doubt this will happen.
This view is invalidated as soon as we cross back below $36k again.
Daily chart had a bullish signal, which even though suboptimal might be the driving force here, it suggests a 17 day rally towards 42k ish. In that chart, we are in day #2 of 17, and target is $42323.8. This is way more likely to happen, although I don't like the idea of people who bought at 42k on the way down reaching break even.
I don't know if this will cause an enduring move, most likely it won't since everyone remains just as bullish as before the top. Historically, people have never been so confident of a recovery, at the end of a bear market. And never were so confident on the way up during a bull market either. We had a wall of worry effect and a self reinforced trend before, this is gone. Amazon rumor, even if true, is not a source of new demand, unlike the Paypal allowing people to buy BTC with their balance news...It is a new way to spend existing already purchased coins. So, a way to sell, not a new way to buy creating new demand.
My bearish view remains the same, only that short term we have some possibility of upside here. Weekly invalidation can take price to $63982.70 as an absolutely best case for bulls, if so, the bearish thesis is wrong, or the way the bear market unfolds is WAY more sideways than down. I EXTREMELY doubt this will happen.
This view is invalidated as soon as we cross back below $36k again.
Daily chart had a bullish signal, which even though suboptimal might be the driving force here, it suggests a 17 day rally towards 42k ish. In that chart, we are in day #2 of 17, and target is $42323.8. This is way more likely to happen, although I don't like the idea of people who bought at 42k on the way down reaching break even.
הערה:
Some fundamental variables, and S/R levels to watch:
הערה:
With the $AMZN rumor proven to be false, a big reason for this jump (together with a short squeeze courtesy of CZ increasing the margin requirements without advance notice) is now gone...Price could logically go back down to where it was before the rumor started moving price, thus moving back below 35k, and probably invalidating the uptrend signals. Let's see what it does. I sit in cash, no rush to act.
הערה:
I'm long $BTC vs $ETH, as my only crypto position, dollar size on each leg is equal, entered a couple days ago.
Dominance is now trending up strongly, we should get a big rotation away from alts into $BTC, which has happened in prior bear markets as well.
The idea is that the trade is dollar neutral, and profits from $BTCUSD faring better than $ETHUSD, either up or down in dollars on its own.
This flight to quality could be a tether fear induced run, or a Binance fears induced run too...not sure what is driving it but my guess is the uptrend in $BTCUSD will be short lived, topping out near 42k by August 10th or so, before resuming the downside move. A lot of people count on price either going to 50k and going back down or going straight up from here, no one thinks price will go lower, so both sides will get disappointed. What's curious is that a lot of people want to buy lower, how low does it need to go over time so that they all capitulate? No one has given up yet...I remain bearish longer term, but bullish $BTC vs altcoins relatively for 8 weeks or so at least. Dominance to at least 55% next, can end up going to 70% again.
Dominance is now trending up strongly, we should get a big rotation away from alts into $BTC, which has happened in prior bear markets as well.
This flight to quality could be a tether fear induced run, or a Binance fears induced run too...not sure what is driving it but my guess is the uptrend in $BTCUSD will be short lived, topping out near 42k by August 10th or so, before resuming the downside move. A lot of people count on price either going to 50k and going back down or going straight up from here, no one thinks price will go lower, so both sides will get disappointed. What's curious is that a lot of people want to buy lower, how low does it need to go over time so that they all capitulate? No one has given up yet...I remain bearish longer term, but bullish $BTC vs altcoins relatively for 8 weeks or so at least. Dominance to at least 55% next, can end up going to 70% again.
הערה:
Daily chart target was hit:
I wonder how much of this action was Binance related (forced closure of derivative positions due to a rush to comply with regulations).
Weekly chart now has a bullish signal, which I find hard to stomach and bullieve, given all variables at play and sentiment.
Long term chart had time left until April 2022, but the drop we had since April made me think the bull market had topped.
This weekend we have huge news coming, part of the infrastructure deal will be changes of tax compliance rules for crypto, since the gov wants to increase tax revenue to pay for the stimulus. It could end up acting as a de facto mining ban due to the impossibility to comply with the rules, the way they are depicted in the text. Crypto lobbyists are trying to fight this, so that they amend it, it will be very important to see how this one pans out.
There is big resistance here and sentiment doesn't fit with a bull market continuation move, more with a bear market rally, so I'm not yet convinced by bullishness in $BTCUSD. That said, I am fine holding $BTCUSD longs paired with same size $ETHUSD shorts, as I see a lot of downside for $ETHBTC here, for a long time.
Weekly chart now has a bullish signal, which I find hard to stomach and bullieve, given all variables at play and sentiment.
Long term chart had time left until April 2022, but the drop we had since April made me think the bull market had topped.
This weekend we have huge news coming, part of the infrastructure deal will be changes of tax compliance rules for crypto, since the gov wants to increase tax revenue to pay for the stimulus. It could end up acting as a de facto mining ban due to the impossibility to comply with the rules, the way they are depicted in the text. Crypto lobbyists are trying to fight this, so that they amend it, it will be very important to see how this one pans out.
There is big resistance here and sentiment doesn't fit with a bull market continuation move, more with a bear market rally, so I'm not yet convinced by bullishness in $BTCUSD. That said, I am fine holding $BTCUSD longs paired with same size $ETHUSD shorts, as I see a lot of downside for $ETHBTC here, for a long time.
הערה:
This is the signal, bullish in the weekly since last week, fully confirmed now. I have to be objective and point it out, I'm skeptical, and rather wait for the infrastructure deal news to be out of the way before buying back spot $BTC...I did sell circa 57-54k anyways, sure, could have bought lower, but there was no clarity before (still not fully clear now).
I'll watch this closely, to decide if we go higher or not, it will be clearer very soon.
I'll watch this closely, to decide if we go higher or not, it will be clearer very soon.
הערה:
If you look at $MSFT after 1987 top, that year the stock market had come down from a rising wedge/terminal pattern top, which indicated a big trend had ended for some time...Naturally, $MSFT crashed too, and stayed sideways after the initial sharp crash, for a long time.
Weekly chart signals failed to reach targets twice, before becoming too choppy to be usable, and you had to move to a monthly or bimonthly timeframe chart to make sense of the move...
הערה:
Another possible parallell, considering the impending risk from the infrastructure deal and future crypto regulation is we had a move like gold from 2011 to 2011 already, from 2011 to 2021.
The weekly gold chart also looked potentially bullish, before finally breaking down, after people confidently bought the same low 3 or 4 times (like 30k now). It took a while and price remained sideways until then, like another year before trending down steadily as the bubble deflated.
The weekly gold chart also looked potentially bullish, before finally breaking down, after people confidently bought the same low 3 or 4 times (like 30k now). It took a while and price remained sideways until then, like another year before trending down steadily as the bubble deflated.
הערה:
Here's a break down of that top, which I shared with my clients:
If you were looking at weekly gold in 2011, you would have thought, hey, this should hit over 2k:
s3.amazonaws.com/tra...shots/v/vx2Of1Bm.png
but sentiment was fucking off...and a yearly signal was cooking in $SPY.
s3.amazonaws.com/tra...shots/v/vx2Of1Bm.png
The mode went higher, making the signal problematic:
A new signal popped, here you would have thought, damn, how is this going up with this retarded sentiment? Is Peter Schiff God?
Maybe not:
Maybe he IS God after all:
Yep:
Imagine the goldbug shrieks, saying, I told you so fucker, we bought the bottom booya, it is going to 5000!
Laser eyes on 5000
Then suddenly...
'I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened'
The bottom everyone bought was rekt.
Don't be shocked if we get some move like this.
The rest is history:
Nouriel had the last laugh, haha. (he had predicted gold hitting $1000 by 2015 in 2013)
If you were looking at weekly gold in 2011, you would have thought, hey, this should hit over 2k:
s3.amazonaws.com/tra...shots/v/vx2Of1Bm.png
but sentiment was fucking off...and a yearly signal was cooking in $SPY.
s3.amazonaws.com/tra...shots/v/vx2Of1Bm.png
The mode went higher, making the signal problematic:
Maybe not:
Laser eyes on 5000
Don't be shocked if we get some move like this.
The rest is history:
הערה:
Price reacted to resistance, there's been a huge amount of momentum with regulatory action and they are starting to crack down HARD on crypto, exchanges, tax compliance requirements, etc.
They will make investment in crypto a problematic and risky thing, mining and DeFi, impossible to comply with and de facto banned in US soil it seems.
Lobbyists are trying to change this but Gensler is hell bent on destroying Bitcoin, he secretly hates it.
They will make investment in crypto a problematic and risky thing, mining and DeFi, impossible to comply with and de facto banned in US soil it seems.
הערה:
The infrastructure bill still represents a huge risk for $BTCUSD and crypto as a whole, specially POS, node users, not so much miners but basically everyone is screwed since they will have to comply with the obligations of a broker even if they are not one and it isn't possible to do this. Unless they amend this and somehow pro crypto lobby gets their way, this is a really negative fundamental development for crypto.
Overall, those at the helm of regulatory bodies are on a crusade against crypto now, it's very clear, not a good thing for the asset class, big money from tradfi is not coming, it already stopped entering the market, and only people already in crypto are involved with the moves here (short squeeze, leveraged longs, some stable coin cash deployed).
I expected a move like April or July 2018, we got it. Now we have a couple days left, any weakness should be a short with a stop at recent highs when confirmed.
Overall, those at the helm of regulatory bodies are on a crusade against crypto now, it's very clear, not a good thing for the asset class, big money from tradfi is not coming, it already stopped entering the market, and only people already in crypto are involved with the moves here (short squeeze, leveraged longs, some stable coin cash deployed).
הערה:
(30k is acting like 2018's 6k indeed, moves became smaller in % magnitude, the rebound is smaller too)
הערה:
Ended up breaking over resistance and now acting as support.
-Miners sell spot to relocate out of China
-Prices drop, making mining profitability suffer
-Miners feel the pressure and rush into speeding up logistics to move their machines abroad, thus selling more coins.
-Microstrategy investors might start looking into ways of securing their interests, as the company potentially might not be able to honor their debts.
-Miners finally relocate, new jurisdictions might have worse conditions for mining profitably, thus margins suffer, thus they are forced into selling their mined coins to cover operational costs until prices recover.
-Prices spiral down, at some point miners operating at a loss go bankrupt and the selling pressure from them wanes. Microstrategy is forced out of their Bitcoin position to make creditors whole.
-By then, potentially the new halving comes, miners face rewards shrinking by half, starting a new miner capitulation cycle, where inefficient mining farms start to behave the same way as described above, until they are out of business.
Until all of this happens, supply can increase more than demand over time, and the market stay in a long, and grindy bear market. It took a long time until miner capitulation occurred after the 2020 bottom after the halving, before price could trend up steadily, but it needed a catalyst and a bullish self reinforced trend to form.
It will become clearer over time, but I think we are headed into something like this, excruciatingly slow bear market selloff, or constant pressure on rallies from miners relocating. $MSTR dynamics in play also, a credit death spiral looms like a Damocles sword on top of Saylor's head. We also have yet to hear about Mt Gox, at some point it might be a factor to consider as well.
Until it is absolutely clear, I will side step all of this action and wait with cash ready to deploy.