Bitcoin / US Dollar Perpetual Inverse Swap ContractBitMEX
Description
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Make no mistake about it. We lie amidst the first wave of calamity. Amidst calamity, it is never so easy to see what is going on, or where things are going to go. If it were, it would neither count as calamity, nor would it be the case that most traders lose money in the market. It would also mean there was no money to be made in the market, and we wouldn't be here doing this.
In one of my previous posts, which I've included, I warned of a risk of a Bump and Run Reversal where one has to be extremely careful at 5.9k to 6.1k. I also said that the pattern can play out in a failed run to 6.1-6.3k. So far, it would seem the read has played out well.
Forget all the lines on that as it came from merely a Google search, but a pattern where we bump here to $6,300 and then are nuked is looking very likely at the moment.
Why am I warning of this? Because alarm bells should be ringing in your head. Why? Because at the same time that the price fell to a key support line, Bitfinex Tweeted that they'll be offering a Chain Split Token (futures) for Bitcoin Gold:
Why does that matter? Because with Bittrex and Finex, who are crediting the tokens but not providing a market, you have to have Bitcoin in your wallet at the time of the snapshot to be credited Bitcoin Gold.
Do you see the idea? So, what is going to happen in the next 12 hours before the snapshot? Is the price going to go to Goblin Town so everyone can buy Bitcoin cheap to get their "free money"?
It is the perfect storm to bring the markets to a $6,300 ATH, and as it stands now, take a look. We are entering all of the key trendlines and breakout points and indicators show reversal.
Take a look at IOTA, OmiseGO, and Ethereum and you'll see a similar pattern play out at the tops of their ATHs.
In trading, the most important thing is not not missing out on opportunities. Opporunities are there every single day in crypto.
What's most important is protecting your money.
Where we are right now is designed fundamentally to take your money away from you.
It's a zero-sum game. Enlighten to it.
Comment
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Yesterday we did not bounce higher than $6000 and have since fallen through major support. Right now we can bottom out around 5480 where the lines converge, but it's not looking like we're getting adequate volume and momentum on reversal.
Look at the 5380 range where the longer term lines converge for a bounce to a possible 6.3-6.4k.
Right now A LOT of shorts are piling up thinking we're going to crash. If everyone is short, can it go down? If everyone were long, could it go up?
Just food for thought.
Comment
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Chart:
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Further to yesterday's update, we indeed may be bottoming out and be prime for a reversal here at the trendline from September 15:
15 minute candles only, but as I write this there's most certainly some signs of reversal.
Thank You very much for this analysis. I decided to make a big move into cash (BTW 80% of my Crypto holdings were purchased less than 10 days back...victim for major FOMO). I liquidated 40% of my portfolio of mainly BTC into cash and BCH/ETH expecting that both of these coins were quite close to the bottom relatively. However, if BTC crashes or corrects, will it take all the coins down with it even if they are ready for an upward move as BTC drives the market. If yes, isn't it prudent to move most of my holdings to cash as it was a recent purchase or should I just hold. My portfolio is 10% down at this moment.
I consider myself as an investor rather than a trader
RiversAndMountains
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@imkeshav, If you're long-term investing as opposed to daily trading you should definitely hold your Bitcoin Cash. There's a post in my history about it. Take a look at the graph in the comments for juxtaposition. $300 is too cheap even if price falls during a crash for a day to $200.
ETH also is likely to exceed $400 in the future but you may see it crash to 160s for a week or two as Bitcoin corrects. In any event, keeping a portion of your funds liquid is very advisable right now. I would suggest you can buy BTC at $4600-$4900. Just keep in mind a dip from 6.3k to 4.9k is going to be very chaotic and intense and it won't feel safe or good to buy when the price is down.
imkeshav
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@RiversAndMountains, Thank you very much for the comment. I did go through your post on bitcoin cash when it was posted (and now again) and it really helped me make up my mind about pushing my BTC holdings completely into BCH yesterday. I realized that BCH was the underdog and had a lot of potential to grow many fold. While at the same time I purchased 80% of my bitcoin at >$5000. When it reached $6000, I realized all the purchases happened because I missed the 3000-4000 ride and then the 4000-5000 ride, I made very tiny investments at that time because I just entered the crypto Space. It was a bad case of FOMO and thanks to various smart folks here, I immediately liquidated all my BTC into cash and 1/3rd into BCH and hope to buy BTC when there is major correction in the next few weeks.
I'm trying to figure out a good strategy of how to get into the market as a medium to long term investor, especially because most of assets are in liquid cash sitting in the bank gaining zero. It's tempting to get in quickly into the market with a plan to hold for the long-term considering that bitcoin will eventually reach 20k+ so entry at 3k or 6k may not make a big difference in that context. At the same time, I think it's a good idea to wait for the big corrections to move large sums into crypto like it happened in middle of September.
Your FA along with TA really helps give a perspective to noobs like me. Especially when you are specific that you when long at $318 for BCH
RiversAndMountains
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@imkeshav, Don't worry about getting quickly into the market. My best advice to you in terms of an opportunity to enter is to take a look at the upcoming Bitcoin correction. When price = $4.6-4.9k you have very good buying opportunities. But that being said, there is major risks to Bitcoin in November because of chain-death-spiral when Bitcoin Cash makes itself known. There are legitimate scenarios where people holding BitcoinCore will lose everything. But nothing is a guarantee.
I strongly recommend staying away from altcoins unless you are very very confident they are legitimate enough to survive a major bubble crash. Hint: pretty much none of them are.
All you need to do is make sure you have a plan, strong hands, and proper execution in terms of trading in the right direction, sizing, targets, and stops. Remember with equity positions you always have the option to hold. It's only when you sell at a loss that you've lost money. If you aren't making any fundamental mistakes than the worst you're losing out on is time.
My suggestion is invest 80% of your holdings in a long-term buy-and-hold situation and diversify between Bitcoin Cash, Bitcoin, IOTA, and Ethereum, with a heavy emphasis on Bitcoin Cash. Decide for yourself how much risk you want to assume with Bitcoin Core and whether or not IOTA and Ether are for you. With IOTA, be careful what you read. There is a lot, a lot of FUD and misinformation just like there is with Bitcoin Cash.
In this world, when people are constantly saying you're bad, you might not actually be bad. In crypto, when people are constantly saying you're good, you almost for sure aren't good.
imkeshav
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@RiversAndMountains, Thank you. Appreciate your advice. From the last few days my portfolio has only BCH (60%), ETH (30%), XRP (10%). At 6100+ I felt BTC was high and liquidated into cash and buying more BCH. The plan was to hold BCH,ETH and wait for BTC to drop heavily to invest in it. However, I was not sure if I entered the market too quickly due to FOMO even after reducing my overall crypto purchases by 40%. And then the market was dropping and my portfolio in BCH, ETH and XRP was down 10%, I was wondering if I had to just cut my losses and wait on the sidelines with cash.
Your comment helped me to rationalize and I did nothing. Fortunately, the alt market is up today. So I hope to keep my holdings through some variations in the next few weeks. The November fork creates a lot of uncertainty and I don't want to be caught holding Core coins that can't be sold on a dying or dead chain. Thanks for your FA. They help a lot
RiversAndMountains
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@imkeshav, You're most welcome man. Since you are dealing with an equity position, remember, you always have the option to hold. You can take your coins, ignore absolutely everything, put them in a wallet you control, and ignore the waves. That being said, you never want to get stuck with bags long-term.
So a suggestion to you is to use a strategy where when your coins hit your profit targets you sell 50% of your inventory and hold 50% of your inventory through the long term.
This lets you effectively short-sell your own position at peaks and leaves you fiat to buy back when it dips without compromising your core position. I suggest using that one with Cash a long the way.
I consider myself as an investor rather than a trader