Is Bitcoin about to crash? | Crypto Craft

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The effect of a stock market correction/crash on cryptos? 4 replies

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Is Bitcoin about to crash?

  • #1
  • First Post: Edited 8:01am Dec 11, 2017 7:42am | Edited 8:01am
As I write, Bitcoin is double topping with last Wednesday's record breaking one day upward push. Was Wednesday the ' Death Throe ' candle, and will this double top, if it holds, be significant?

" As a strict technical analyst, I cannot honestly see how Bitcoin can keep on rising as it has recently been doing without a significant pullback, even a complete collapse. I know that it is unlike any other market being traded right now, but surely, if human nature, which after all is the only factor which drives the markets, can be used as a guide, then logically, this monster has to come down, and come down hard, and I write this now, because we could be now seeing Bitcoin begin to unravel.

Price always returns to its 200 day moving average, always. Look anywhere and you will see this to be true.

Bitcoin is so far above its Daily 200 day simple and exponential moving averages now, that it seems impossible to me that it can keep on climbing without coming way back, and I mean back to 10,000 or lower. Yesterday's record breaking move, the single biggest one day candle in its history, a $3,761 rise, could well be a ' Death Throe ' candle which signals the top or bottom of a market, temporarily or otherwise.

These Death Throe candles can be seen on any market, on any time frame, I myself look out for them, for they often signal the end of a trend. They are typically much longer than any candle preceding them, and I have drawn attention to them quite a few times before in my threads. The fact that the price sold off hard immediately after yesterday's candle closed is very significant.

Time will tell. " - A story comment of mine from last Thursday.

Could the correction, when it comes, turn into a selling rout as holders of Bitcoin rush to secure the gains they have made?

It may take time to unravel, but a rejection off of last week's high could well open the door to some fairly significant selling pressure.

This is not a prediction, just an observation of what may unravel, but of course, this is Bitcoin, and just as it has been doing every time it has pulled back, it is bought to new levels.
  • #2
  • Dec 11, 2017 9:43am Dec 11, 2017 9:43am
I still think Bitcoin is going to be a USD1Trn market capitalisation, especially if the Gold Market, also a risk-off asset class has a market capitalisation around USD7Trn.

This means Bitcoin could reach in the range of USD60k - 70k per Bitcoin; and it would probably well surpass any other market bubble in history by a number of times.

I'm waiting until then before shorting!
  • #3
  • Dec 13, 2017 5:01am Dec 13, 2017 5:01am
As I said above, I'm a pure techie, and I trade what I see regardless of what the pundits are saying or what an instrument is supposed to do.

At this height above its 200 simple or exponential moving average on the Daily chart, diversion like this is a strong sell warning on anything you care to look at. I''m sure there are plenty of people still piling into Bitcoin even at these levels, such is the hype right now among people with no investment or trading experience jumping in blind, but would any of you honestly be buying into Bitcoin at these levels unless you were just trading the intraday movements?

For me, the chances of it coming down, or at the very least, pulling back a few thousand dollars from this level is pretty high if TA is anything to go by. Then, and only then, may it be safe to jump in on the long side depending on where the support is.
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  • #4
  • Dec 13, 2017 5:37am Dec 13, 2017 5:37am
Quoting cat
As I said above, I'm a pure techie, and I trade what I see regardless of what the pundits are saying or what an instrument is supposed to do. At this height above its 200 simple or exponential moving average on the Daily chart, diversion like this is a strong sell warning on anything you care to look at. I''m sure there are plenty of people still piling into Bitcoin even at these levels, such is the hype right now among people with no investment or trading experience jumping in blind, but would any of you honestly be buying into Bitcoin at these...

https://player.fm/featured/cyber-currency
  • #5
  • Dec 13, 2017 5:59am Dec 13, 2017 5:59am
Technical analysis don't quite work well for BTC, there was only one trading strategy thus far: buy on the dips and accumulate. You said price always goes back to 200 MA? It depends, last time price crossed this level was a touch at $480 level and the last time is actually crossed was at $280 level, don't forget the MA moves up as well, now the 200MA is at around $3900 level. I dont see price going that further down, unless something catastrophic happen, I noticed that 200MA moves about 800 pips up every month on the daily, in one year from now, this MA will be at $11K level, but what could be the price of BTC at that time? Maybe $50K? Maybe it will disappear, we don't know, by now, no sighs of exhaustion. Now look at S&P500, the last time price touched the 200MA was on NOV 2016, there was also only one strategy for it, buy on the dips, and by the dips, I mean "small corrections". I've been burned many times by only looking at technicals, but since I understood the fundamentals behind and I included on my daily routine, traders improved quite significantly.
  • #6
  • Edited 6:51am Dec 13, 2017 6:41am | Edited 6:51am
Quoting Fx 35
Technical analysis don't quite work well for BTC, there was only one trading strategy thus far: buy on the dips and accumulate....., don't forget the MA moves up as well.... by now, no sighs of exhaustion. .
I do not completely disagree with anything you have said, but just a couple of things:

TA can actually work on BTC, and the smaller time frames can be traded using the same indicators and parameters one would use elsewhere, but it is extremely volatile that's for sure. As for the only strategy that works being buying on the dips, the same can be said for any market in a strong uptrend, which BTC is in, so there is nothing new there. Traders get burned most from trading against the trend, attempting to pick tops and bottoms, so as I said above, I am not advocating that people sell, merely drawing an observation based on how I see things developing according to my own method and experience trading other markets.

Yes, MAs of course move over time, but that doesn't stop the price reverting back to them. It always does. Maybe with BTC it won't, who knows?

The reason I started this thread is that I personally am seeing possible signs of exhaustion right now. Time will show whether these are real or not.

I do not actually see a complete crash, despite the title of this thread, not back to zero or just a few thousand for sure, though one never knows, but a return to 10,000 or so is possible. I would be buying, and selling, but only intraday using the same method I always use. However, buying into BTC at this level with a big stake hoping for it to go to the moon would for me be incredibly risky.

For those who are interested, the price is currently rising, and I have resistance today at around the 17,600-800 level if it gets there.
  • #7
  • Dec 13, 2017 3:07pm Dec 13, 2017 3:07pm
Well, she has been falling today, and rallying a bit at the moment. If it goes lower, then 15,400 or thereabouts is a level of potentially strong support which could send it back up. Below that, and 15,000 is the H1 200ema which sent it back up on the 10th of December when the price made contact with it.

I still have potential resistance at 17,630 if it makes it back up to those levels within the next day or so.
  • #8
  • Dec 15, 2017 7:45am Dec 15, 2017 7:45am
Update on Bitcoin as seen from a purely technical perspective. 630 was the resistance I posted above, which it broke, but as moving averages never remain in one place for long, that's okay, and with Bitcoin a few hundred dollars here or there means little. I now have an upper level of resistance for the H2 time frame of 830, which I know I'm late in pointing out, but it's there nevertheless, so it will be very interesting for me to see whether BTC recognizes it , or just blows right through it. It should stop the price from going higher, today at least.

What I am really watching though is this H2 100sma, because it has provided crucial support for quite some time now, sending the price back up on Nov 24th, 29th, 30th, 1st Dec,( just above it ), 3rd, ( a bit above it, but to the pip on the 61.8% fib from the previous low ) 9th and 10th ( again just above and very close to the 61.8% fib again ) and now at the current highs but another dip is due I believe. There have been other time frames to concentrate on and other moving averages, but right now, it is the H2 tf, and the 100sma. If the price does soon drop back down to this moving average, then itn will either be bought back up, or , if it breaks, the way will be open for it to drop down to the next big supporting moving average which is the H2 200ema which I currently have at 13,860, which could, should if it gets there, be a great buying opportunity.
  • #9
  • Dec 17, 2017 4:04pm Dec 17, 2017 4:04pm
Okay, so BTC has pushed just shy of $20,000 today!!

But just look at how far it has now risen above its 200 daily moving average, it's just nuts. It defies all logic for it to just keep on climbing without at least a solid pullback from these levels. I'm not wishing it, for I really do not care what it does, as I am not holding Bitcoin, but from a pure TA standpoint, this thing looks to be screaming to come down. Would anyone seriously be buying it at these levels?

A nice fat doji closed out today, and following a big, positive full candle on Saturday, this is rather interesting!
  • #10
  • Dec 17, 2017 4:25pm Dec 17, 2017 4:25pm
Quoting cat
Okay, so BTC has pushed just shy of $20,000 today!! But just look at how far it has now risen above its 200 daily moving average, it's just nuts. It defies all logic for it to just keep on climbing without at least a solid pullback from these levels. I'm not wishing it, for I really do not care what it does, as I am not holding Bitcoin, but from a pure TA standpoint, this thing looks to be screaming to come down. Would anyone seriously be buying it at these levels? A nice fat doji closed out today, and following a big, positive full candle on Saturday,...
Hi cat,
Thank you for your topic. I also see what you mention, that the bitcoin monster is climbing like crazy at unsustainable rates if compared to any of the standard currencies. I see it returning to the 4H ema before it hits past 20k and flies to the moon. Cat, may I ask about the indicator you use to check for divergence, is it MACD 26 and 12 period? Apologies for the question, Just began my long and difficult journey to become a trader a few months ago.
Kind Regards,
Tzamo
"Work hard, put in the effort, and follow your dreams..." -Me
  • #11
  • Dec 17, 2017 11:24pm Dec 17, 2017 11:24pm
Quoting PariCovek
I still think Bitcoin is going to be a USD1Trn market capitalisation, especially if the Gold Market, also a risk-off asset class has a market capitalisation around USD7Trn. This means Bitcoin could reach in the range of USD60k - 70k per Bitcoin; and it would probably well surpass any other market bubble in history by a number of times. I'm waiting until then before shorting!
I repeat it will hit USD60-70k based on Fundies, easy.
  • #12
  • Dec 18, 2017 8:17am Dec 18, 2017 8:17am
Quoting tzamo
{quote} Hi cat, Thank you for your topic. I also see what you mention, that the bitcoin monster is climbing like crazy at unsustainable rates if compared to any of the standard currencies. I see it returning to the 4H ema before it hits past 20k and flies to the moon. Cat, may I ask about the indicator you use to check for divergence, is it MACD 26 and 12 period? Apologies for the question, Just began my long and difficult journey to become a trader a few months ago. Kind Regards, Tzamo
Hi Tzumo,

Yes, it's MACD 12,26,9. The ribbon is more reliable, but the histogram can work also.

Regards,

cat.
  • #13
  • Edited 8:51am Dec 18, 2017 8:29am | Edited 8:51am
Okay, following yesterday's post, BTC is indeed coming down. First real support test is going to be the H1 100sma currently at 18,065. If it gets there and it breaks, then the 200ema/sma are both together at 17,125. Both levels can bring buyers back in, but to new highs? We will have to see. Should the H1 200ema break though, then we have to go to the higher time frames to see where the main support lies. If Bitcoin is going to dump to much lower levels, then it is still early days, with a great deal of money sitting on the long side hoping for much higher levels. The lower it goes though, as with all bubbles, the more this money begins to panic!

....quick update. It is coming off the 30m 200ema again as it did earlier today. Now if it is going to behave like any other instrument, then what it may do is track back towards the 100sma on the 30m tf, which is coming round over the top. A pattern like this tends to repeat itself with great frequency, especially when momentum is currently down, as it is atm on the smaller time frames. The price goes through the 100sma, finds support on the 200 ema or sma, tracks back up towards the 100sma, then falls again to new lows. We'll see what happens this time. I have the 30m 100sma @ 19,070
  • #14
  • Dec 18, 2017 3:28pm Dec 18, 2017 3:28pm
Can Bitcoin maintain rally?

Bitcoin futures started trading on the CME overnight, which is the world’s largest futures exchange. This is the second exchange to offer bitcoin futures, further cementing the crypto currency’s legitimacy. The launch has gone fairly smoothly so far, which should bolster investor confidence. But with the noticeable rise of other cryptos, such as Bitcoin Cash, Etherium and Ripple, can Bitcoin continue its impressive rally or has it gone up too high, too fast? So far, sentiment remains positive and investors’ appetite unquenchable despite Bitcoin’s extreme volatility and past vulnerability. I personally do not think that Bitcoin is in a bubble yet, but once every Tom, Dick and Harry starts talking about it then you will know it is in a bubble. Even then, who coulf possibly know what the ultimate high will be?

But for now, BTC/USD still remains in a strong uptrend despite today’s consolidation. While Bitcoin futures climbed above the 20K market overnight, the underlying asset has yet to hit that hurdle. But the relatively tight consolidation below this level means it could be a matter of time before price potentially tests this level. Indeed, we haven’t seen any distinct signs of reversal so far and all the key support levels remain intact. In fact, after the overnight drop, the crypto currency bounced nicely off a key support at 17900, which was previously resistance. In addition, a short-term bullish trend line which cut through this area also held firm.

Thus, going forward, 17900 will be the pivotal level to watch now as the bulls and bears battle it out. Only a decisive break below this level would mean the short-term bias would turn bearish. Meanwhile, on the upside, the key area to watch is between 18975 and 19275, which was formerly support, now offering a bit of resistance. The bulls require a move above this area soon, as this would indeed confirm that the overnight break below Sunday’s low of 18465 was just a run on stops rather than a break in market structure. If and when price breaks above here then there’s little further resistance until the 20K mark. Beyond this psychological hurdle are the Fibonacci extension levels of the most recent drop, at 20165 (127.2%) and 20800 (161.8%), where we may see some long-side profit-taking, should price get there in the first place.

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Source: TradingView and FOREX.com. Please note, the prices on the chart may be different to those offered by FOREX.com
  • #15
  • Edited Dec 19, 2017 8:14am Dec 18, 2017 4:30pm | Edited Dec 19, 2017 8:14am
BTC rush is maintained by its own hype and fueled by greed. But it actually has zero fundamental value. Literally zero. Everyone hopes it will go above 50-60-100K or more and thats why they keep pumping their money in, to be "early adopters" and to gain a big fat return in their favored fiat currency. Not to support the idea or a new currency. They are there for the fiat money.
While other asset classes like metals, stocks, etc. represent real world value and have real world applications, BTC has none. Especially since its Blockchain technology is stoneage, compared to other Cryptos like BCH, ETH, XMR, etc. (Transaction fees, effort and time)

Sure, back in the days visionary people wanted it to be the new currency of the future, but besides from some hipsters who used BTC to buy some coffee or pizza, its main application was anonymous payment in the Darknet. Some big names like Dell or Steam accepted BTC payment, but they all have removed this option already again, because it either wasn't used and / or fees and transaction time became too high.

So the original BTC ideology has already shifted to other Cryptos like BCH, ETH, XMR, etc.

Does this mean BTC will crash? No. It means nothing. I'm still invested in BTC, aswell as in BCH, ETH, XMR and others. But the unnatural growth on one side makes me happy, and worries me at the same time. So I personally started to reevaluate my portfolio over the last weeks.
Also BTC is the best example that a market is never overbought or oversold. People will pay what they think is its worth. Especially if they see it rising every day and YouTube full of videos featuring celebrities like Richard Branson or Bill Gates and titles like "Bitcoin will hit $100.000 or $1 MILL".

In the Fed Press Conference last Wednesday, Yellen was asked a question about Bitcoin. She replied that Bitcoin plays a very smale role in the payment system, it is not a stable store of value, it is not a legal tender and is a highly speculative asset.

Long story short: My opinion is to milk the cow as long as you can. But to be prepared to jump off before people wake up. With the cancellation of the 2x upgrade, many big investors have already withdrawn their money from BTC and put it in other Cryptos.
  • #16
  • Dec 19, 2017 7:59am Dec 19, 2017 7:59am
Quoting cat
...... Now if it is going to behave like any other instrument, then what it may do is track back towards the 100sma on the 30m tf, which is coming round over the top. A pattern like this tends to repeat itself with great frequency, especially when momentum is currently down, as it is atm on the smaller time frames. The price goes through the 100sma, finds support on the 200 ema or sma, tracks back up towards the 100sma, then falls again to new lows. We'll see what happens this time. I have the 30m 100sma @ 19,070
I'm only quoting myself just to draw attention to what I said yesterday, because for all traders reading this, what I wrote is important, as it is a pattern that if anticipated can bring lots of green pips, no matter what you trade.

The price did indeed rise to the 30m 100sma during the Asian hours, where it found strong resistance and has since fallen, exactly as I said it might.

It has now found support further down on the H1 200sma, which I had at 17,540 when the price made contact with it. It now sits at 17.585.

What it may do now is repeat the same movement again, but this time on the H1 time frame, so pulling back off of the H1 200ema/sma, back towards the 100sma which as before on the 30m tf is curling round over the top, which tends to act like a magnet for the price.
  • #17
  • Edited 8:38am Dec 19, 2017 8:24am | Edited 8:38am
Here's BTC on a logarithmic scale, which is the relevant view. Looks like a bullflag to me. Building up for the push above $20000?
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  • #18
  • Dec 20, 2017 2:20am Dec 20, 2017 2:20am
Down nearly $4000 from the high. Since my last post, it did push up off of the H1 200sma towards the 100sma curling over the top, but only part of the way before falling again. Now the support is the H2 200ema and the price is currently respecting it, so we'll see how many buyers are going to pile into it now, and whether it'll be enough to push it to new highs.
  • #19
  • Dec 20, 2017 2:59am Dec 20, 2017 2:59am
Quick note.

You'l have probably noticed one thing about this thread, and that is that although some posters are offering fairly detailed fundamental analysis about the direction they think BTC is going to go, I personally am interested, as my posts show, purely in what my charts are showing me, from a technical standpoint. I honestly haven't got a clue what it is going to do, so this is really just an experiment to see how well BTC reacts to the technical parameters I have in place on all my charts. This does not mean that fundies are not welcome here, far from it, as I can learn from them, but my own analysis will continue to be purely technical, and I will post only what I see in front of me on my charts.

I wrote above that I didn't think that high could be sustained, and to date, I have been right. Now we will find out whether this was just a fairly small pullback, which it badly needed for new buyers to come in, or the start of something bigger to the downside.
  • #20
  • Dec 20, 2017 3:02am Dec 20, 2017 3:02am
Quoting cat
[...] so this is really just an experiment to see how well BTC reacts to the technical parameters I have in place on all my charts. [...]
Maybe you should have chosen a different title then? Just saying.
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