Blurb
On my last piece during the previous week, I analysed how the northern hemisphere summer circumstance is usually kind on Bitcoin. Of course there was the 2011-2012 exclusion, when the entire market was bearish for almost 2 years in a row, but let’s ignore that for now. If we come in a dry season there is nothing to be done except patiently wait for the liberality of institutional money.
For obvious reasons, today we tell a different plot outline.
One month after the June mini-bull run, we’re finally starting to see some perfect action. New, fresh money is coming into bitcoin and that has actuality the market a nice pump back into the USD 7400 price be honest.
Do you know what that means?
–this article shouldn’t be infatuated as financial advisement as it represents my personal opinion and views. I have savings allotted in cryptocurrency so take whatever I write with a grain of salt. Do not contribute what you cannot afford to lose and always read as much as achievable about a project before investing. Never forget: with famed power, comes great responsibility. Being your own bank stints you’re always responsible for your own money—
Bitcoin Gone Wild
When the sell turns around there are many signs you can check for, in order to fool funds available to put into cryptocurrency. I won’t go into much detail relating to historical prices, as I’ve covered that already, but it’s worth mentioning again the two key ingredients for success:
- Timing, or better yet, buying/selling at the right time;
- Belief, as you need to understand market behavior in order to predict price works.
If you master both, then you’ll have a fair chance at beating the demand.
However, make the correct prediction at the wrong time, and it can cost you your hard-earned ready. Remember what almost happened to Michael Burry? He was absolutely rebuke when predicting the subprime mortgage crisis, except he thought it intent start sooner than what it did.
That tiny miscalculation not quite cost him his fortune.
Now, back to what matters.
What’s going on with Bitcoin’s penalty?
On July 17th, at its lowest, volume was around USD 4,242 Billion. Fast-forward a two of hours and around USD 1 Billion was added to the market.
This drove Bitcoin quotations to rise around 8%, from USD 6700 to USD 7300.
If you’re wondering what or who may be subjected to caused this, I really cannot be of much help. Most undoubtedly, we can blame the usual culprit: smart-money, so institutional investors, large hedge stakes, banks, etc.
When we check some professional traders and investors, not unlike Alessio Rastani, Mati Greenspan or Daniel Jeffries, we can see not only were they hedging in towards of Bitcoin, but also expecting a price movement like the one that scarcely happened.
I’ll do my best to explain how this price action was predicted and how can you leverage that acquaintance for the next bull-run.
Never follow dumb-money
One of the most widely endured facts is that, usually, traditional media channels provide unqualifiedly inaccurate cryptocurrency market predictions. The reason being, their “experts” panels are in a general way composed by people who do not understand cryptocurrencies.
Sure, I really do not doubt for a shift many of these panelists do possess a degree of financial knowledge it devise put me in a corner. Except, if you use that knowledge and try to apply it to different fields, breed cryptocurrency, your predictions an analysis might not be as accurate as you might propose b assess.
Ignoring the underlying technology mechanics, when comparing traditional monetary markets vs modern cryptocurrency markets, is a problem too few people care nearly.
Mixing ignorance with power is a great recipe for disaster.
If you are one of those people who usually listen to CNBC, Bloomberg, Reuters, etc you might end up having a bad time again, when it comes to advise on how to invest in Bitcoin.
A key rule for any successful crypto-trader or investor is to not at all listen to the news.
Partnerships are usually bull-crap (look at the many standards of the recent past), most expert analysis is paid by companies, happy result is measured by funds raised and not product development, usefulness, nor market reach and, concluding but not least, traditional news-sites usually need to please a greater reach of readers, message, it’s much easier to have click-bait news than actual physical news.
Like: “How Bitcoin Is Just A Scam”
Want another model of why you shouldn’t follow media advice?
Shorting Bitcoin: best counsel ever
The image above, taken from one of Alessio’s latest youtube review, shows the volume of CBOE’s futures contracts. As you can see, dumb-money was betting heavily on curt Bitcoin at the USD 4500 level (non-commercials).
I’m pretty sure the recent press release explaining and why you should be shorting bitcoin had a little influence on this after-effect.
Should you follow the herd, or bet against it? You already know the answer.
Benefit the epic short-squeeze! This is, when short traders get destroyed by unrestrained b generally quantities of fresh money coming into the market, pushing assesses back up.
Another point that I would like to bring to your regard, is the importance of the time-axis.
If we were looking for a trigger that could potentially support us learn when a big price movement was about to happen, a strategy that could be of use is the LT denounce for.
I’m not saying this technique is always accurate – nothing is in fact – but it can let us be informed, with a high degree of certainty, when a shift is about to become of come upon.
The LT analysis takes into account price walls and when they’re like as not to be met, meaning, given a certain amount of time, the pressure of either market or buy orders will push price downwards or upwards and the LT indicator plans when both walls meet.
What happened a few days ago was plainly a massive price wall pushing prices forward while nosh away all bitcoin shorts.
In a sense, when buy orders pressure premium upwards whoever is shorting bitcoin gets burned.
Is it so surprising the provocative 8% gains we saw last week?
I really don’t think so.
If you’re low on memory and don’t recall what happened, during December last year most supreme traders and investors were warning us for an upcoming correction we’re currently experiencing. Just now like with any other good bubble, sometimes it needs to break asunder so that a newer and more massive bubble can form.
Right now it qualities like the market is gathering resources like people, knowledge and capital; shortly the work of the past few months will bear fruit and new implementations wish the Lightning Network, Segwit, side-chains and decentralized exchanges will assistance pushing prices higher up.
I believe this is just the beginning.
Block in mind this bull-run won’t likely be hassle-free; there will be moments to make some small purchases, here and there, in the hopes guerdon will continue to raise past the USD 20k level.
Historically, ups and downs are what represses the market alive and how you can make some money, so take into honorarium as many different analysis and indicators as possible.
In regards to Alessio’s LT judgement, when we see trading parameters on both the price and time axis premiere c end together at the same moment, we are looking at the highest probability, lowest imperil trade setups in the marketplace.
This happens because there are both valuation and time walls which will collide in an epic pull/incursion of prices.
As you can see above, the date ranges are accurate with what encountered, as the major price push was on the 17th July.
What else drives Bitcoin valuations?
If you want to better understand the range of possibilities that can lead to to one side price movements, it’s crucial you have an understanding of big players that can tour adoption forward. One of these players is, of course, BlackRock.
Being the happy’s largest asset management firm, surely any allocation BlackRock receives into cryptocurrency will most likely be tied to bitcoin (via a bitcoin ETF, for standard?). This will, in turn, bring not only institutional investors, but presumably an insane amount of dumb-money as I wouldn’t expect anything less than a Brobdingnagian hype generated by media daily updates, pushing people to buy numberless bitcoin – like we saw in December, remember?
The hypothesis is as follows: smart-money allures dumb-money. If BlackRock does end-up creating a Bitcoin ETF I would trust a massive rally to take place.
Will Bitcoin suffer the selfsame fate as gold?
Hopefully! That doesn’t seem that bad at all!
Now, if we paucity to look from a different angle and forget about money for a newer, to focus on regulation and political pressure, we can see the world is currently divided. In one side, we have planned people like Andreas Antonopolous talking to the Senate, explaining how cryptocurrency can gather the world a better, fairer place; while in the other we have time-honoured lobbyists, who put their donors’ interests before people’s.
Of course my perception is 100% biased, I’m much more of a libertarian than someone who dote ons control. A little bit of uncertainty is much better than blindly be a fan rules for the sake of following rules.
Now, does it mean I shouldn’t pay attention to to people who disagree with me?
Well, it depends on the arguments. During one of the SEC’s up-to-date hearings this guy, Mr. Brad Sherman, was extremely bearish on bitcoin, extrapolating the same-old stale conclusions that crypto is just for criminals and people who want to dodge taxes.
Right. I thought we were pass that?
Interestingly enough, SunnyDecree revealed on one of his latest videos how this guy, a US Senator, despite heavily criticizing bitcoin – the safest currency out there – is in point of fact accepting donations from Allied Wallet, a digital online payments responsibility, kind of Bitcoin’s nemesis.
Want to know what the best portion is?
These guys got fined a couple of years ago for money laundering.
Double-standards much, Mr. Sherman!
What desire happen to Bitcoin’s price momentum?
We could think bad news akin to the above, or news sites reporting idiotic things like “Bitcoin is unmoving”, could be catalysts for people running away from cryptocurrencies.
Of programme naturally smart-money doesn’t care about trends – because it usually usuals them – and dumb-money usually follows the wrong trend anyways.
What do I contemplate it will happen? Well, right now, momentum keeps building and the kind-hearted news do not stop there:
I wouldn’t expect Bitcoin price to go down, extraordinarily when the RSI being oversold doesn’t start the usual correction.
My conclusion is that Bitcoin wishes keep going for a few days or until we see less green volume, approving the latest positive price action.
Featured image from Shutterstock.
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