Crypto Anyone thinking/planning to short bitcoin?

Once upon a time there was barter. Then came metal and then metal coins. Paper money was once backed by reserves of metal but that changed and now governments print as much paper fiat money as they need. Now we have a digital currency with no backing, no reserve and theoretically we can create an infinite number of crypto currencies.

Hmmmmmm?

Bitcoin is speculation just as forex trading is speculation. Nothing wrong with it but only speculate with that which you can lose.

 

Yes, you can with the "shitcoins" as they're termed, but not with others.

For example there will only ever be 21 million Bitcoin "minted", (or mined if you will), due to the way the algorithms were designed. There's already 16 million of them and it will take until 2140 for the 21st million BTC to be mined as the algorithm gets more difficult, require more and more power to resolve the block-chain so BTC will get more and more scarce as people hold on to them, and scarcity is what creates the sense of value. That goes for anything, not just magical internet money.

BTC is becoming seen s as a wealth store whilst other alt-coins that are faster to transact with and more anonymous may become the spending crypto currencies of the future.

There's some fascinating stuff out there.

A really good place to start is the Bad Crypto Podcast, entertaining too.

We're entering a brave new world.....

 

(Above was posted here 8 Dec)

Updated chart



As most of you are aware I have been warning people for some time to consider getting out of BTC even posting in advance exact levels and expected timing for a major high 8/12 - 22/12. Conviction is increasing with this price rejection of 17/17.5k level.

Here is the highest probability scenario as I see it, my opinion only: if we don't get a weekly close above 18,000 in December and the red arcs at 17,000/17,500 continues to reject price this thing will be selling off hard for quite some time until at least Feb next year and quite likely longer. Price could rapidly sink to surprisingly lower levels, people tend to forget that one month ago price was around $5,600 USD!!

I am concerned that all the euphoric feelings of fast money people are coming in to this on will suddenly turn to fear. It may never happen but it is a very real possibility to remain aware of.

Zooming in on an updated chart, price has near perfectly rejected the first red arc, bounced down to the green one below, then back up in to the second red arc and rejected again lower. The expectation I have from this we are destined to see lower yet as the harmonics have now proven themselves and it's now a matter of my expected timing cycles to take over and turn price lower for some time ahead.



One really useful way to gauge a better sense of the true value of a market traded asset is to apply market auction theory and a statistical bell curve based on time or volume traded at any given price. The fairest price is established by examining the widest part of the bell curve and 'true value range' is established by finding the area of greatest agreement, again centred around the widest part of the bell curve and with limits of one standard deviation away from the mean, 68.27% of all trading has occurred in this value area and if we go to 2 standard deviations 95.45% is captured.

Reference: Peter Steidlmayer and Jim Dalton

Crash course in market/volume profile

The market profile and/or volume profile made up from the history of trading on the instrument, or from a recent significant low point gives a great deal of useful information. One of the reasons to use it is to look for targets and identify the areas where people saw either fair value or unfair value pricing of this instrument to get a sense of where it may return to 'fair value' again.

Market/volume profile is a totally different way of looking at the market than price movement and represents the natural market auction process. It is based on the statistical bell curve and reveals the true 'value areas' where most trading has taken place. At these areas traders tend to agree this is where price belongs at 'fair value'. It also reveals where the least amount of trading has taken place and therefore the majority of traders consider this 'unfair value' so either meaning over or under valued. Very little volume is traded at these unfair value areas.

Market/volume profile basically plots the most significant areas of historical trade that have emerged so far and helps to identify both the high volume nodes and low volume nodes of the actual trade history. These are very high quality and reliable support and resistance areas by definition. A market profile is one based on how many times price traded at each level where as a volume profile is built on volume traded at each level. Of the 2 (similar profiles) volume profile is the more popular at institutional level. Let's look at a brief introduction to the info available from this...

1. A high volume node (wider profile) shows 'agreement in value perception' and healthy trade where as a low volume node (thin profile or gap) shows great 'disagreement in value perception' and low amount of trade.

2. High volume nodes tend to act as a 'magnet' and attract price strongly then act as support or resistance and low volume nodes tend to act as 'hot plate' and reject price strongly and also act as support and resistance.

3. Overall the places where price will tend to gravitate back to are the high volume nodes. These are simply the peaks of the wider areas in the profile and represent statistically where the majority felt that fair value is for the instrument.

4. The largest profile peak of all is known as the point of control for the chart (POC) and represents the 'fairest price' that traders have voted on as the most volume of trade (agreement) occurred at that level.

5. The POC for each profile is the thick purple line that is drawn through the thickest part of the profile.

6. The profile can statistically give you a 'value area' (price range) where 70% of all the trading took place and thereby identify a more accurate view of the price range where traders saw 'fair value'. These are the thicker purple lines that encompass most of the profile's wider area. This is a long way down from where price is now.

Below are the market profile and volume profile for XBTUSD going back to a significant previous low (slightly different low for each profile).

Green lines represent the high volume nodes, red lines represent the low volume nodes.

Remember.... green = 'magnet', red = 'hot plate'

The profile is over at the left hand side of the chart and basically that's the vertical, bumpy looking thing like a mountain range turned sideways

White background chart is market profile, black background chart is volume profile.





No advice DYOR

 

Alex Straker, I really appreciate you taking the time to explain your working on this, I'm finding it super interesting.

This is why I love Propertychat- people like yourself willing to take some time to help educate the masses.

 

@Alex Straker I have to take my hat off to you, the details and depth you goto in support of your opinions really impresses me, you are a brave man to be going against the Bitcoin herd!!! Lol
I will be watching the price carefully and following you carefully!
Thanks for your effort and contribution mate

 

@Alex Straker Thanks for the analysis and comments, it is good to read some analysis that's not a meme or "Will Bitcoin be 1million soon?" threads.

 

Thanks @Erica, @Silverson, @ZOMG

I have a favourite saying when it comes to understanding markets.....and my clients here will know what I am about to say.....

"Everyone has a right to be wrong in their opinion but no one has a right to ignore the facts."

Now on that note, I have an important update to BTC in USD

Now that we have some more bars on the chart I have switched from a weekly chart to a daily chart view and re-calculated the geometry to see if I can pinpoint dates. Usually this will give almost identical chart results to the weekly view but in this case there is a small variance to be aware of.

Updated Daily View Bitcoin in $USD Chart (details on chart)


No advice, DYOR

 

All hail the shifting red arcs

 

Sell off seems to be underway at the moment, total market cap when I went to be last night 599b down to 570b at the moment, both BTC and the ALTs both down, so money is exiting Crypto market altogether

 

Will IC Markets let you short any of the altcoins? The hype surrounding BTC has given momentum to some of the alts with even worse long term prospects.

 

@Jamesaurus ....interesting you say that one the difficult things is finding a broker who will accept short side trades!


General info only to follow, no advice, DYOR

IC markets (who are mainly a forex dealer) disabled trading on BTCUSD and other cryptos around a week ago. They will still allow you to close existing positions but will not accept new trades period (long or short) any more, they have disabled trading as have around 80% of the CFD dealers I am aware of. GoMarkets are the same.

Interactive Brokers (worldwide respected & sophisticated brokerage in equities, futures, options, etc) have introduced and are allowing trading on futures, CME exchange is live this week, that oughta shake things up a bit. So far futures trading on crypto hasn't exactly caught fire and is still mainly retail, low volume players but this will change at some point and that's when the real violence will begin

Interactive brokers (my preferred futures and options platform - not advice) will allow trade on low leverage (50x) which is plenty in my view on this wild kicking mule of a market. They are also being responsible and warning profusely of the risks in crypto. when you start leveraging a vehicle with these insane characteristics, the amounts of money that can be involved are staggering to say the least.

Few articles of interest.

Regulator warns investors off Bitcoin

Kevin O'Leary: This common behavior among bitcoin investors is a 'cocktail for disaster'

THE BOTTOM LINE: Top strategist disses bitcoin as 'Bitcon' and says it meets all 5 criteria of a speculative bubble

 

For me the futures market for Bitcoin could not have opened at a more perfect time!! The beautiful thing is the futures contract opened trade at $20,650 USD, even higher than coin exchanges were trading at the time. Got some incredible short entries

So here's the real nail in the coffin for Bitcoin (and probably crypto generally IMO)......the opening price on the Jan 2018 futures exchange was the highest price of all trade on this exchange so far. In other words ever since the CME futures exchange opened the futures contract has gone into a steady downtrend, don't take my word for it, here's the chart from CME exchange...

https://s.tradingview.com/x/KtHoKakN/


I maintain exactly the same view on timing of the top as when I first posted about shorting this with even more conviction now the expected timing for major top is 8-22 Dec and then expect a bear market leg until at least Feb possibly much longer.


Posted on 8 Dec...

Updates

Weekly view



Daily view



No Advice, DYOR

 

I think you have been very lucky Alex. If not for a little Wessel that goes by the name roger ver, Bitcoin would be sitting well above 20k. Your graphs mean nothing. I’ve seen them be proved worthless time and time again when it comes to crypto currencies. They don’t work here

 

Can you explain to me how your graphs predicted the Chinese government crypto crackdown, the South Korean exchange hack, Bitcoin Cash hostile takeover attempt etc..
It really amazes me how your graphs predict these events

 

Bitcoin to hit US$1m?

 

Yes, clearly just luck of course. It's all Roger 'what's his name's' fault!!! That's for sure!!!@~#%$!!

Hmmmmmm.....bit upset about your crypto account getting decimated perhaps??

Ummmmmm.........they worked fine for me, market reversed exactly when I expected and luckily I just happened to be short. Can you explain which part didn't work, I'm not following??? Let's see how lucky I get about price going back to 8400 shall we???

They are called charts and I am extremely please to hear that you think they are worthless, quite happy to let people decide for themselves

 

IMO, anyone using derivatives for something as volatile as cryptocurrencies needs brown undies

 

Nice work on the short Alex.

 

My cryptos are actually in good shape. Both the alts i hold doubled overnight.

I have held bitcoin long term and will continue to do so as i believe in its future.

A major correction of a further 50% will not phase me. In 2017 alone bitcoin has had 6 major corrections where the price has fallen by over 30%. Each correction has brought a major increase afterwards of an average 162%.

At the start of december together with some friends i predicted the price of bitcoin to be $16500 AUD I think this should be fairly close. You don't have to be Einstein to see it needed a correction.

We will have to wait and see how lucky you are with your 8400. You may just have a gift. I have been following all bitcoin price "predictors" and have not yet seen anyone get even relatively close. I don't know how long you've followed cryptos for but one tiny thing can lead to a currencies price skyrocketing or crashing (for example. I own digibyte which doubled in price last night due to the fact John McAfee praised it on twitter

 

I also have done well over the last 48hrs with alts and it seems like it is continuing to strengthen (or remain the same I'm not sure, after much deliberation (due to lack of understanding) I started only recently, but only now it seems to be to me some sort of investment phenomenon and is quite hard to believe until you start to experience the returns.... )

For every alt that slows there seems to be at least another dozen that start yielding high 70-80 and 90's, it's like a never ending gravy train.

Come wednesday im moving more in, too good an opportunity to miss it seems.