As we seem to be nearing the break out from the wedge, I want to give you final thoughts. A lot of people, when presented with solid TA say "but FA trumps TA, and our FA is so bull right now". Well, to them I have to say 2 things:
1) TA precedes FA. Almost any FA that you think affects the price often acts just as a catalyst rather than the cause. if you do your due diligence you will see that the scary market crash (and I mean massive selling, vertically going down on 3 hr scale) has already started BEFORE the Chinese news. You may say "it were whales with insider info". Maybe, maybe not. But it doesn't matter as all top TA analysts saw that this crash is very likely about to begin even days before it started. The rising wedge pattern, on a macro scale, with diverging RSI and volume acting funny were the things that many interpreted as "it is very likely ETHUSD will start falling hard soon". Same rising wedge was happening at the same time on BTCUSD graph as well (I did not see that as I mostly was doing only ETHUSD analysis).
Next, read the first few paragraphs of the book called "Technical Analysis Explained". It shows how TA precedes FA. How the stock prices skyrocket BEFORE the company's revenue starts to grow and actually by the time the company is doing well and it's publicly known, the price of the stock is already down.
2) Next, let's try to analyze the fundamentals.
But not with a shallow view, but rather as intelligent investors, who don't simply trade based on the title of the news that just came out, but rather analyze the relevance and the bias of said news. The same piece of news sometimes can be colored in bull or bear, on whatever the editor wants. Based on how he words the article and especially how he words the Title of the article the news can be perceived as bull or bear. While after very careful examination and removing the pain that was added by the editors and just looking solely on the facts that were mentioned in the article, it is often found that the news are actually neutral.
2.1) The China regulations. The recent bullish article that was posted about how "the limitations on crypto will be possibly canceled once the Chinese elections are over, by Oct. 18th". Now go back and re-read the article. There are no sources. This whole article was based on semi-tinfoil hat idea that the China banned ICOs and restricted the exchanges so heavily that many of them had to close down, just to appeal to communist views right before the elections. Now, I am a big procrastinator myself, but I doubt that the Chinese government is as bad as me, to try and rush the ban right before the elections to look good. Yes in some universe this is possible. Maybe that's what happened. But isntead, I rather see that the Chinese saw how bubbly these ICOs are. 95% of them being scam. This is similar to the MMM pyramid (google it), just has a different process of distributing and collecting the money from the further investors that are lower steps of the ladder. When the BlackMoon or whatever that Chinese ICO is called came out with the intention to be the first (afaik) Chinese ICO, government did not want to see the sick ICO craze to spread to China from the West. That's why the stopped it then and there. That explains the timing. If the leaders of the current Chinese government saw the possibility of not being re-elected, they wanted to make sure that what is left after them does not hurt the country. and ICOs are something that will hurt the pockets of many regular people, who buy them the last.
2.2) The Japan regulations.
2.2.1) Margin trading is restricted, not allowed, banned in Japan as the part of those regulations. That is a big part of the volume gone. It's like funny how when a new coin is about to be added to BitFinex or Polo, people get excited, as the price is usually expected to grow cause of the volume of the markets. But (continued: www.twitlonger.com/show/n_1sq7m4f)
1) TA precedes FA. Almost any FA that you think affects the price often acts just as a catalyst rather than the cause. if you do your due diligence you will see that the scary market crash (and I mean massive selling, vertically going down on 3 hr scale) has already started BEFORE the Chinese news. You may say "it were whales with insider info". Maybe, maybe not. But it doesn't matter as all top TA analysts saw that this crash is very likely about to begin even days before it started. The rising wedge pattern, on a macro scale, with diverging RSI and volume acting funny were the things that many interpreted as "it is very likely ETHUSD will start falling hard soon". Same rising wedge was happening at the same time on BTCUSD graph as well (I did not see that as I mostly was doing only ETHUSD analysis).
Next, read the first few paragraphs of the book called "Technical Analysis Explained". It shows how TA precedes FA. How the stock prices skyrocket BEFORE the company's revenue starts to grow and actually by the time the company is doing well and it's publicly known, the price of the stock is already down.
2) Next, let's try to analyze the fundamentals.
But not with a shallow view, but rather as intelligent investors, who don't simply trade based on the title of the news that just came out, but rather analyze the relevance and the bias of said news. The same piece of news sometimes can be colored in bull or bear, on whatever the editor wants. Based on how he words the article and especially how he words the Title of the article the news can be perceived as bull or bear. While after very careful examination and removing the pain that was added by the editors and just looking solely on the facts that were mentioned in the article, it is often found that the news are actually neutral.
2.1) The China regulations. The recent bullish article that was posted about how "the limitations on crypto will be possibly canceled once the Chinese elections are over, by Oct. 18th". Now go back and re-read the article. There are no sources. This whole article was based on semi-tinfoil hat idea that the China banned ICOs and restricted the exchanges so heavily that many of them had to close down, just to appeal to communist views right before the elections. Now, I am a big procrastinator myself, but I doubt that the Chinese government is as bad as me, to try and rush the ban right before the elections to look good. Yes in some universe this is possible. Maybe that's what happened. But isntead, I rather see that the Chinese saw how bubbly these ICOs are. 95% of them being scam. This is similar to the MMM pyramid (google it), just has a different process of distributing and collecting the money from the further investors that are lower steps of the ladder. When the BlackMoon or whatever that Chinese ICO is called came out with the intention to be the first (afaik) Chinese ICO, government did not want to see the sick ICO craze to spread to China from the West. That's why the stopped it then and there. That explains the timing. If the leaders of the current Chinese government saw the possibility of not being re-elected, they wanted to make sure that what is left after them does not hurt the country. and ICOs are something that will hurt the pockets of many regular people, who buy them the last.
2.2) The Japan regulations.
2.2.1) Margin trading is restricted, not allowed, banned in Japan as the part of those regulations. That is a big part of the volume gone. It's like funny how when a new coin is about to be added to BitFinex or Polo, people get excited, as the price is usually expected to grow cause of the volume of the markets. But (continued: www.twitlonger.com/show/n_1sq7m4f)
Comment:
My bad, I think I have confused margin trading halt in S. Korea. Crypto margin trading in Japan seems to be fine. It was not intentional, I thought I had seen it in that 11 exchanges document, but did not check back the sources. The KYC and AML points in Japan still stand tho.
Comment:
If we compare this to 2013 pattern (as many analysts do), then there are 2 things:
1) Top of wave B in 2013 was approximately 0.786 Fibonacci of the fall (note that on such a huge time and price scale the uncertainty value is very big, I'd estimate if being around 30 USD). Estimation is 4530s plus minus 30 USD.
2) However, the B wave also extended higher than the b subwave of the Major A wave. Which would be higher than 4700s.
Now, I believe the Fibonacci is much more important in this case.
1) Top of wave B in 2013 was approximately 0.786 Fibonacci of the fall (note that on such a huge time and price scale the uncertainty value is very big, I'd estimate if being around 30 USD). Estimation is 4530s plus minus 30 USD.
2) However, the B wave also extended higher than the b subwave of the Major A wave. Which would be higher than 4700s.
Now, I believe the Fibonacci is much more important in this case.
Comment:
Based on TA, the macro trade here would be to have target 1 at 3100s (to make sure to get fuilled), T2 at 2880s, T3 at 2300s and T4 at 2100s and T5 at 1900s. I'm leaning that 2300s is the most optimal target based on how likely it will hit to the reward ratio. The stop loss would be around 4700s-4800s.
If you would like to trade the small swings, you can see goldbug1's TA or EXCAVO's TA, they have intermediary targets, I may post some updates regarding my intermediary targets as well later for the bounce ups along the way.
Interesting thing to note is that the alts are not following the BTC pump these last 3-4 days. That only suggests to me that the biggest pockets in crypto (who were the guys who got rich off the BTC and thus have most of their capital in BTC as well) are manipulating the BTC price to get out at a decent prize, while they don't care much about alts.
If you would like to trade the small swings, you can see goldbug1's TA or EXCAVO's TA, they have intermediary targets, I may post some updates regarding my intermediary targets as well later for the bounce ups along the way.
Interesting thing to note is that the alts are not following the BTC pump these last 3-4 days. That only suggests to me that the biggest pockets in crypto (who were the guys who got rich off the BTC and thus have most of their capital in BTC as well) are manipulating the BTC price to get out at a decent prize, while they don't care much about alts.
Comment:
A good example of what I meant by "be diligent in checking the source of the news, as the editor can paint the news to be bullish or bearish as they wish".
Here, a "hopeful bull" kind of article: www.cryptocoinsnews....g-bitcoin-exchanges/
Which is quoting this Chinese article and CNLedger:
news.xinhuanet.com/2.../04/c_1121762259.htm
twitter.com/iamjosep...s/915513472409944064
Upon closer look, one can see that the Chinese article is actually very bearish. In fact, the AML policies and big-amount funds movement restrictions that are mentioned in the Chinese article seem to refer to the
!!!possible further shut down of "localcoins", OTC trading in China!!!-this is my own painting of bear picture, this is not clearly stated in the article, but the article language is definitely bearish.
rather than welcoming new exchanges to get licenses. The CNLedger itself is saying that a licensing program for cryptocurrency exchanges release and possible resuming of trading activities in China is "possible, but not likely to be very soon"
So, the lesson to be learnt - check the sources. I welcome you all to check the Chinese article as well as CNLedger twitter and especially if any of you speak Chinese very well to maybe give more detailed points of the Chinese article in the comments here. Thank you.
Here, a "hopeful bull" kind of article: www.cryptocoinsnews....g-bitcoin-exchanges/
Which is quoting this Chinese article and CNLedger:
news.xinhuanet.com/2.../04/c_1121762259.htm
twitter.com/iamjosep...s/915513472409944064
Upon closer look, one can see that the Chinese article is actually very bearish. In fact, the AML policies and big-amount funds movement restrictions that are mentioned in the Chinese article seem to refer to the
!!!possible further shut down of "localcoins", OTC trading in China!!!-this is my own painting of bear picture, this is not clearly stated in the article, but the article language is definitely bearish.
rather than welcoming new exchanges to get licenses. The CNLedger itself is saying that a licensing program for cryptocurrency exchanges release and possible resuming of trading activities in China is "possible, but not likely to be very soon"
So, the lesson to be learnt - check the sources. I welcome you all to check the Chinese article as well as CNLedger twitter and especially if any of you speak Chinese very well to maybe give more detailed points of the Chinese article in the comments here. Thank you.
Comment:
Well, as far as I can tell, TA-wise, we either dump really soon, or the C wave is somehow canceled. So far I am still holding my short, but the price is around the point of no return area. Although this last pump was on reduced volume, I did not expect us to cross 4540s. Next few hours will decide if our bearish thesis was correct.
Comment:
Not sure if this will work out and whether it's applicable on this scale, but here is a very cool find by Schmittcoin:
twitter.com/BTC_Schm...s/917099704936263681
Also, for those wondering, do we have to have a UT, here is the answer:
"Often demand is so weak in a distribution TR that price does not reach the level of the BC or initial ST. In this case, phase C's test of demand may be represented by a UT of a lower high within the TR. "
Source: stockcharts.com...school/doku.php?id=chart_s...
twitter.com/BTC_Schm...s/917099704936263681
Also, for those wondering, do we have to have a UT, here is the answer:
"Often demand is so weak in a distribution TR that price does not reach the level of the BC or initial ST. In this case, phase C's test of demand may be represented by a UT of a lower high within the TR. "
Source: stockcharts.com...school/doku.php?id=chart_s...
