Understanding Bitcoin Trend. Past, present and future.
ที่อัปเดต:
Hoping to keep this fairly simple. Firstly, I'm posting this as a direct response to poster MrRenev's OP in which he mentioned cryptocurrencies, bitcoin, ICOs etc should be illegal. It is obvious in his post that he's trying to create FUD pretty desperately, because he mentions things like 'crypto trading is not halal/kosher' etc. among many other things. The post is excruciatingly long, and I'm sure many over here have read it, hopefully with an open mind, but the bashing he received is pretty well deserved, not only because of his super obvious social manipulation tactics, but also because his comments and rebuttals are beyond offensive (like he offered to buy me out in the future to wipe him after he takes a dump and keep me as a servant or something along those lines).
Look, you can write your opinion, you can do your TA, some people do it for fun, some people do it to enhance their own ability (the more you teach, the better YOU become), and some people do it because they want themselves as well as others to succeed. You have a very small percentage of people who are desperate like MrRenev. Maybe they don't have an educational background in finance, economics, commerce, etc. Maybe they started trading after watching some videos on Youtube, and picked up some very good knowledge, however became overconfident (or thought they are smarter than they actually are) and lost a lot of money. I myself have made money, I've lost money. However anything I've lost, I've taken full responsibility for it. Yes market manipulations exist. Yes there are things beyond our control. But our decisions are ours, if we leveraged 100x and lost, we should take full responsibility of it. There's responsible, calculated trading, and there's trading that's basically gambling. So if you gamble and lose, don't try to use social manipulation to get back what you lost. That's just sleazy.
Anyways, since MrRenev commented would you trust established banks, organizations, monetary systems in place or (according to him) new, up and coming things like Bitcoin or Cryptocurrency, I'd like to make the same kind of COUNTER-APPEAL. Would you trust a no-name, no-face, disrespectful troll like MrRenev, who has no educational/career background disclosed or verified, or someone who actually has a degree in Economics from a renowned university when it comes to anything related to Economics? Okay intro out, now back to the analysis of Bitcoin. I'm using Coinbase as a base, but you can use the same concept overall.
A. Trends and Cycles: Most of us are aware of economic cycles. So the same is the case with BTC. If you look at the graph above you'll notice that BTC technically went through accumulation/expansion period between 2015 and 2017. I know some of you might disagree and point out bull/bear markets during these periods, and you are correct if you want to break down everything in shorter periods. I'm looking at the bigger picture however, so the smaller bull/bear market periods do fit into the grander scheme of things. Here are my reasons:
1. Historic Indicators: I'm using RSI, MFI, ChandeMO in conjunction with the Weekly Candles. What do we see here? Take a look at between May 2015 and Dec 2017.
Around May 2015, RSI levels started @ <38 and didn't peak 80+ levels until Jun 2016. During this time, the average RSI (just approximating it eye-balling at the RSI graph) was around 45 I would say. This lasted for 1 year.
Now starting in June 2016 until Dec 2017, RSI levels maintained an average level of around 70, and bounced off lows of approximately 55 a few times. Peaked 80 or above levels about 12 times during this period.
And that's just RSI. MFI levels maintained around 60 during the first phase and around 78 during the second (uptrend) phase. Overall around 70 I think.
Chande Momentum Oscillator is such a good tool to understand market momentum but not always used but it is one of the most reliable. What does ChandeMO show? CONSISTENTLY above the ZERO line, with a couple outliers where momentum shifted to below zero (bearish). Common things like MACD and Awesome Oscillator paints a simpler but similar picture.
Now let's switch to post Dec 2017 until Dec 2018. What do we see?
RSI plummets, from the peak of 90 all the way down to 29 levels. During this period, RSI maintained a DECLINING average of 50, however keep in mind, this was a DECLINING AVERAGE, so bearish trend is definitely confirmed. What about MFI? All the "smart money" coming in? Averaged around a paltry 40.
Most of all, Chande MO, shows us just how deep the bear market was. Went below the ZERO line, and basically maintained a -40 trendline during this entire period. Awesome Oscillator however tells us that bearish divergence is decreasing. That's because the time it is taking to get back to the zero line and make a hill over the zero line is decreasing as you can see. In fact for the first time since April 2018, AO has painted bars over the zero line on the weekly candles (the past couple weeks). MACD is looking good as well. We've broken out of these negative zones since turn of the year.
RSI has risen from that low all the way to 71 currently, and you see a gradual increase. MFI paints the same picture, with more and more money coming in, and MFI levels increasing from around 20 to 90+ currently. ChandeMO has moved over the zero line since Jan 2019 and maintaining. There will be pullbacks, and we would hope for more of the same as was in the past because that is a sign of a healthy (relative) market. Ideally we would like RSI, MFI to maintain between 50 and 60 levels over the next year or so, and have a few bursts towards the top a few times. We would want ChandeMO to maintain a trendline over zero consistently.
2. The Future: So what does this tell us for the future. If Fundamentals remain constant or get positive boosts, then this accumulation/uptrend will continue. Just take a look at how many days it took for the Accumulation/Uptrend phase to materialize historically between May 2015 and Dec 2017... 900+ days. Compared to that, the bear trend (assuming it is over, I'll address the assumption in the next few lines) lasted a measly 364 days. And that IS A GOOD THING! Why? That tells us there are investors, people, who are interested in BTC. BTC isn't dying off, and neither are legitimate cryptocurrencies with legit uses. Otherwise it would've continued the fall, momentum wouldn't have changed, and you'd have seen lower highs. That isn't what we're seeing. So everything is looking good, and that's really great news for continued interest in BTC, Cryptocurrencies, Blockchain tech, etc. As long as fundamentals hold, there's a bright future for electronic currency/credit.
Look we don't know what tomorrow will bring for sure. As I'm typing this I might just drop dead. The world might spontaneously blow up into a nuclear warzone. Anything can happen, positive or negative. At the end of the day, we have our biases and our own interests. Ofcourse I'm invested in BTC and Cryptocurrencies. I left my job so I can do this and be a free man and live my life and not work a 9-5 job for the next 30-40 years. BUT I'm not blind and I'm not stupid. I wouldn't get into this if I didn't understand the historic trends. I wouldn't get into this if I didn't have a solid background in Economics and Finances. And the risks I am taking, are calculated. I've made mistakes and lost (noob mistakes like buying FET.AI during the first hour of being launched, and I've not made that mistake again). And that's how you can make it here. If you make a mistake, take a good hard look at yourself and ask some very important questions. Did you lose because you lack the technical know-how or was it because of lack of experience? Are you an avid reader who will spend hours reading related news/posts every single day? Do you learn from your mistakes or do you always go by gut-feelings? Do you want to risk losing 200% of your investment (when you gamble to earn the same within a short period of time) or do you want to take small profits like 2%, 5%, 10% on a daily basis and understand exponential growth?
Don't let others instill fear in you and don't let others exploit you by creating false sense of hope. Find the balance, read, read, read. Knowledge is power. Keep a level head, understand markets and global economies and whenever you take risks, take calculated risks so you can recover. Be a good human being, help yourself and others. Don't be like MrRenev. Good luck to everyone and I hope the future is bright for all of us (even MrRenev).
Look, you can write your opinion, you can do your TA, some people do it for fun, some people do it to enhance their own ability (the more you teach, the better YOU become), and some people do it because they want themselves as well as others to succeed. You have a very small percentage of people who are desperate like MrRenev. Maybe they don't have an educational background in finance, economics, commerce, etc. Maybe they started trading after watching some videos on Youtube, and picked up some very good knowledge, however became overconfident (or thought they are smarter than they actually are) and lost a lot of money. I myself have made money, I've lost money. However anything I've lost, I've taken full responsibility for it. Yes market manipulations exist. Yes there are things beyond our control. But our decisions are ours, if we leveraged 100x and lost, we should take full responsibility of it. There's responsible, calculated trading, and there's trading that's basically gambling. So if you gamble and lose, don't try to use social manipulation to get back what you lost. That's just sleazy.
Anyways, since MrRenev commented would you trust established banks, organizations, monetary systems in place or (according to him) new, up and coming things like Bitcoin or Cryptocurrency, I'd like to make the same kind of COUNTER-APPEAL. Would you trust a no-name, no-face, disrespectful troll like MrRenev, who has no educational/career background disclosed or verified, or someone who actually has a degree in Economics from a renowned university when it comes to anything related to Economics? Okay intro out, now back to the analysis of Bitcoin. I'm using Coinbase as a base, but you can use the same concept overall.
A. Trends and Cycles: Most of us are aware of economic cycles. So the same is the case with BTC. If you look at the graph above you'll notice that BTC technically went through accumulation/expansion period between 2015 and 2017. I know some of you might disagree and point out bull/bear markets during these periods, and you are correct if you want to break down everything in shorter periods. I'm looking at the bigger picture however, so the smaller bull/bear market periods do fit into the grander scheme of things. Here are my reasons:
1. Historic Indicators: I'm using RSI, MFI, ChandeMO in conjunction with the Weekly Candles. What do we see here? Take a look at between May 2015 and Dec 2017.
Around May 2015, RSI levels started @ <38 and didn't peak 80+ levels until Jun 2016. During this time, the average RSI (just approximating it eye-balling at the RSI graph) was around 45 I would say. This lasted for 1 year.
Now starting in June 2016 until Dec 2017, RSI levels maintained an average level of around 70, and bounced off lows of approximately 55 a few times. Peaked 80 or above levels about 12 times during this period.
And that's just RSI. MFI levels maintained around 60 during the first phase and around 78 during the second (uptrend) phase. Overall around 70 I think.
Chande Momentum Oscillator is such a good tool to understand market momentum but not always used but it is one of the most reliable. What does ChandeMO show? CONSISTENTLY above the ZERO line, with a couple outliers where momentum shifted to below zero (bearish). Common things like MACD and Awesome Oscillator paints a simpler but similar picture.
Now let's switch to post Dec 2017 until Dec 2018. What do we see?
RSI plummets, from the peak of 90 all the way down to 29 levels. During this period, RSI maintained a DECLINING average of 50, however keep in mind, this was a DECLINING AVERAGE, so bearish trend is definitely confirmed. What about MFI? All the "smart money" coming in? Averaged around a paltry 40.
Most of all, Chande MO, shows us just how deep the bear market was. Went below the ZERO line, and basically maintained a -40 trendline during this entire period. Awesome Oscillator however tells us that bearish divergence is decreasing. That's because the time it is taking to get back to the zero line and make a hill over the zero line is decreasing as you can see. In fact for the first time since April 2018, AO has painted bars over the zero line on the weekly candles (the past couple weeks). MACD is looking good as well. We've broken out of these negative zones since turn of the year.
RSI has risen from that low all the way to 71 currently, and you see a gradual increase. MFI paints the same picture, with more and more money coming in, and MFI levels increasing from around 20 to 90+ currently. ChandeMO has moved over the zero line since Jan 2019 and maintaining. There will be pullbacks, and we would hope for more of the same as was in the past because that is a sign of a healthy (relative) market. Ideally we would like RSI, MFI to maintain between 50 and 60 levels over the next year or so, and have a few bursts towards the top a few times. We would want ChandeMO to maintain a trendline over zero consistently.
2. The Future: So what does this tell us for the future. If Fundamentals remain constant or get positive boosts, then this accumulation/uptrend will continue. Just take a look at how many days it took for the Accumulation/Uptrend phase to materialize historically between May 2015 and Dec 2017... 900+ days. Compared to that, the bear trend (assuming it is over, I'll address the assumption in the next few lines) lasted a measly 364 days. And that IS A GOOD THING! Why? That tells us there are investors, people, who are interested in BTC. BTC isn't dying off, and neither are legitimate cryptocurrencies with legit uses. Otherwise it would've continued the fall, momentum wouldn't have changed, and you'd have seen lower highs. That isn't what we're seeing. So everything is looking good, and that's really great news for continued interest in BTC, Cryptocurrencies, Blockchain tech, etc. As long as fundamentals hold, there's a bright future for electronic currency/credit.
Look we don't know what tomorrow will bring for sure. As I'm typing this I might just drop dead. The world might spontaneously blow up into a nuclear warzone. Anything can happen, positive or negative. At the end of the day, we have our biases and our own interests. Ofcourse I'm invested in BTC and Cryptocurrencies. I left my job so I can do this and be a free man and live my life and not work a 9-5 job for the next 30-40 years. BUT I'm not blind and I'm not stupid. I wouldn't get into this if I didn't understand the historic trends. I wouldn't get into this if I didn't have a solid background in Economics and Finances. And the risks I am taking, are calculated. I've made mistakes and lost (noob mistakes like buying FET.AI during the first hour of being launched, and I've not made that mistake again). And that's how you can make it here. If you make a mistake, take a good hard look at yourself and ask some very important questions. Did you lose because you lack the technical know-how or was it because of lack of experience? Are you an avid reader who will spend hours reading related news/posts every single day? Do you learn from your mistakes or do you always go by gut-feelings? Do you want to risk losing 200% of your investment (when you gamble to earn the same within a short period of time) or do you want to take small profits like 2%, 5%, 10% on a daily basis and understand exponential growth?
Don't let others instill fear in you and don't let others exploit you by creating false sense of hope. Find the balance, read, read, read. Knowledge is power. Keep a level head, understand markets and global economies and whenever you take risks, take calculated risks so you can recover. Be a good human being, help yourself and others. Don't be like MrRenev. Good luck to everyone and I hope the future is bright for all of us (even MrRenev).
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If anyone has any questions, please feel free to ask, I'll try my best to answer using what knowledge I have. :)
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