Another day of Bulls vs Bears in the Bitcoin Market. As I discussed yesterday we found resistance in the $11,600 area that led to a few rapid sell offs. Interestingly though, $11,500 has proven itself to be a rather formidable short term support level having fought off the Bears a handful of times.
Bitcoin does appear to be trending up; however, based on the fundamentals I still find myself lacking faith. I find my inability to drink the recent Kool-Aid stems from basic fundamental analysis of the charts. First the volume, yesterdays volume was 35% less than the preceding day, yet the price slowly ticked upwards. To me and every other technical analyst of chart patterns this is a warning sign of reversal.
https://www.forbes.com/sites/tomaspray/2014/01/11/volume-always-precedes-price/#441880ff18a3
https://www.moneyshow.com/articles/daytraders-4676/
The 12 hour MACD is showing more balance with Bitcoin neither overbought or oversold which may indicate a shorter term run up and new highs. How long that will hold I'm unsure.
The 1day, 3day and 1 week are showing Bitcoin to have exceptional upside divergence. This is an indicator that price will have to come down to once again find balance, it also shows buying action is cooling off as the market is somewhat uncertain.
Moving averages; we are too far extended from all key moving averages, which again indicates that the price will be coming down at some point.
http://www.futuresmag.com/2017/07/28/reading-between-lines-trading-envelopes
https://www.investopedia.com/university/technical/techanalysis9.asp
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:moving_averages
If I were to drink the Kool Aid and buy into the irrationality I could see continuing hype based appreciation to $20,000 prior to crashing 60 percent or more to wherever the moving average support lines are at that point.
As a practical investor with common sense I just cannot justify the assumed risk that would accompany tossing my money in at this point. Especially in light of the numerous $600-$1000 drops that have occurred in minutes wiping away hours and hours of hard fought gains. Call me a pussy, but I’m going to sit out in the short term and wait to make a move at the start of the next 3 day buying session on the MACD.
I also think there is a strong possibility that the futures traders coming in very soon will short this thing into the dirt. As stated I'm going to play my cards close to my chest and remain cautious until it all shakes out. There are always opportunities to make percentage points when you adhere to your strategy and remain disciplined.
Etherium @467
Etherium like Litecoin is waiting on Bitcoin to make a move. Price has been hovering in this area for the past few days while Bitcoin bounces all over the place. If you are feeling risky then trade the 1 hour time frames looking to get in and out on smaller percentage gains. Don’t be greedy, and keep your exposure small.
LiteCoin @ 102
Slightly off its 107 high, I could see lightcoin bouncing around the $100 mark throughout the rest of the day depending upon the state of Bitcoin. Trade the shorter term trends and look for high $90 buys and fast sells at anything above that. Of note, Litecoin volume usually spikes higher with rising prices prior to a large upwards move by Bitcoin. To that end Bitcoin touched a new $11,900 high this A.M. on some really shitty volume where Litecoin acted contrary to its usual price action in this regard.
While irrational I sometimes use LiteCoin as an indicator of an indicator due to my conspiracy theory mindset of those in the know (big money) using Bitcoin to manipulate Litecoin prices for gains. As I did not see the usual spike in LiteCoin price prior to the move by Bitcoin this morning it lessons my faith in either asset at this price level. That said I feel as though both may be over inflated. If you just love risk, then by all means jump in on the shorter time frames and try and snipe .50 cents here and there, but be careful as a sharp reversal is just around the corner that could see $10, $15, or $20 drops occur in seconds.
Taking all that into consideration I am going to HODL my original predictions here:
Prior Days Analysis:
@pawsdog/12-4-2017-the-market-view-and-trading-outlook
@pawsdog/12-3-2017-the-market-view-and-trading-outlook
@pawsdog/12-2-2017-the-market-view-and-trading-outlook
