Be on ALERT to BUY: Bitcoin has already been testing the bottom!

6 เม.ย. 2018

Depending on who you follow on TradingView, you may see stubborn bulls or growling bears. The former believe now and forever is the time to buy -- because of mooning and lambos and yadda yadda yadda. The latter believe that we have yet to see the bottom -- oh, and HODLing is for idiots or fools.

Looking at some basic yet important regression analytics, I'm here to tell you that you need to be on ALERT to BUY. Now please note, this does not mean I am telling you to buy right now. Nor will I tell you when to buy. This is not financial advice! This is just an analysis-based alert -- one to help you monitor the situation -- because favorable buying opportunities could very soon be at play. You, not I, must determine the confirmation/timing of the buy, based on how this technical analysis fits into your own analysis.

Anyways, here's how I constructed this BTC chart:
- Daily candles, dating back to about mid-August
- 14-day RSI and 14-day Williams %R
- A trendline connecting the wick bottoms from oversold periods in mid-Sept and early-Feb
- A regression trendline with 1.5 StdDev (re: best fit to show turn-of-the-year overbuying)

As you can see, (1) the %R is indicating a heavy oversell, while the RSI indicated a recent recovery from the oversell fringe (re: RSI was 30-31 last weekend). Meanwhile, (2) the past week has seen the BTC price action dance around the pink trendline that connects the wick bottoms from the past two major lows, both of which had oversold indicators, per the RSI. Following that trend, we've seen the daily lows steadily creep up in April, specifically $6450.00 on Easter and $6568.84 yesterday. Finally, (3) you can see our friend Bitcoin currently hanging at about negative-1.5 standard deviations below the regression trendline.

Put all this together, and it creates a strong argument that Bitcoin already hit the bottom. So good news: this should be a very supporting time for BTC. However, if candles end up showing a substantial decline below this alleged bottom in the upcoming days, it will signify a noteworthy and potentially lengthy detour to Bitcoin's recovery. Due to this possibility, we cannot yet confirm we are truly at the bottom. But at least a very legitimate argument is there.

These are the type of situations in which regression analytics can help earn you some nice profit. If you trusted the RSI plus %R and bought on Sunday, you could've sold early this week and profited 750-1K per BTC on a simple two-day trade. That's not too bad for what ended up being an unsustained bare-bones bounce back. Now, imagine what can happen if there's an actual rally that follows this potential regression-based bounce...

...Well, let's not get ahead of ourselves. Stay on alert for now, and wait for multiple technical confirmations before acting on any buys. My best to you, as we trade!

7 เม.ย. 2018

บันทึก

2018-04-07, 3:40pm EST

During this crucial time, I just wanted to tighten some things up on the chart, as well as update where the BTC price is relative to the two trendlines. So what I did was adjust and annotate some things, then showed a one-month close-up.

Here's what I tweaked:
> I confirmed the pink trendline to EXACTLY touch lows on 2017-09-15 and 2018-02-06, giving us the best possible comparison to the low on 2018-04-01.
> I also added a price range of +440 for the upper bound and -440 for the lower bound of the pink trendline. This range was determined by an approximation that multiplied Bitcoin volatility (6.4%) to the BTC price ($6875) recognized at around 9:45pm on 2018-04-06.
> I confirmed the bar range for the regression trendline to reflect lows on 2017-09-15 and 2018-04-01, giving us the best possible comparison to the price action of the past week.
> I confirmed the "close" source for all the following analytics: RSI, %R and regression trendline.

It ends up these tweaks almost PERFECTLY fit into the price action of the past nine days. The close of 2018-03-30 to the close of 2018-04-02 all hugged and teased the lower-bound line (shown in basic blue) of the regression trendline. The close of 2018-04-03 to now has established a bounce back and forth inside those upper and lower bounds of the pink trendline. Needless to say, BTC is certainly testing this range as the potential "bottom."

So what does this mean? I'd say stay on ALERT to BUY, but don't get too overzealous just yet. Don't take this comment as financial advice; do your own analysis as well before trading!

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8 เม.ย. 2018

บันทึก

2018-04-07, 9:55pm EST

I do want to add that the upper bound of the pink trendline sets up a potential BUY opportunity, but the smart thing to do would be to wait for a confirmation that the recent down trend is over for now.

If we want to see some confirmation of a recovery, BTC must get past the upper bound of the pink trendline. This needs to happen with a candle closing above the boundary. If the candle after that proceeds to show positive momentum in price action and volume, that would be an even better confirmation.

We simply CANNOT settle on the current bounce, as the high has not surpassed any of the recent bounce-back highs, which are annotated with blue exclamations. Note those highs:
> 2018-02-20: $11775.00 (N/A days later)
> 2018-03-05: $11645.36 (13 days later)
> 2018-03-12: $9890.00 (7 days later)
> 2018-03-21: $9174.00 (9 days later)
> 2018-04-03: $7520.00 (13 days later)

The high of the recent bounce back is only $7064.64, so this is a big reason why most of the tight-picture TA remains bearish. Note that if today's price was to creep past the upper bound before close, it would need to get to at least $7600.00 in approximately 22 hours. The makes for about a $764 increase from close to close today. Bad news is that BTC hasn't shown such daily improvement since 2018-02-17, although it did get between $700 and $763 thrice since (02-19, 02-26, 03-11).

In other words, I don't see BTC passing the upper bound today, and that means the future price will need to be HIGHER THAN $7600.00 to pass the boundary. Let's speculate for a moment and claim that the buying volume increases on 2018-04-16, which is the deadline date for tax returns in the United States. (Many speculate that the tax returns have caused a decrease in buying action. That is not a theory I personally subscribe to, but let's ride with it for now.) If BTC closed at $7850.00, it would start a new candle on 2018-04-17 past the pink trendline's upper bound. Obviously, this would set a better high than 2018-04-03, at 14 days later. That wouldn't completely get us out of the woods and away from the bears, but it would at least provide the much-needed good news.

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9 เม.ย. 2018

บันทึก

2018-04-09, 4:25pm EST

We are starting to see the price action fall oh so slightly below the pink trendline's lower bound! See below, where the price dropped to $6630, although it's been flirting both below and above that as I type this.

Note that this isn't yet below the lows of 2018-04-01 ($6450.00), 2018-04-06 ($6518.88) or 2018-04-07 ($6605.08), so I'm not yet worried about BTC's potential recovery taking a detour.

I'll be update with annotated lows like I did with the highs once today's dip is completed.

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11 เม.ย. 2018

บันทึก

2018-04-10, 8:20pm EST

As promised, the photo below shows an update after yesterday's drop came to a confirmed end. It looks like Bitcoin saw a low of $6617.00 that tops the previous lows of the month. So that means the holding pattern inside the zone of my pink trendline continues. The fact that the price action to stay within this tight range of about $880 is quite impressive, but it may also signify that BTC may finally be going sideways before ascending back up.

But that conclusion is mere speculation right now. We need some confirmation of the move up and down before a BUY or SELL action is warranted. The best move now is to HOLD and see where Bitcoin leaves the channel.

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11 เม.ย. 2018

บันทึก

2018-04-10, 8:35pm EST

Also, I'd like to point out how impressive the two trendlines (the pink one connecting the two previous oversold lows and the blue one indicating the 1.5 StdDev of the regression trendline) are holding up in April.

It actually all started on March 29th, when Bitcoin entered the "pink trendline channel" (as I'll call it). The low of $6905 actually touched the pink trendline itself. Later, on March 31, Bitcoin closed out somewhere between the two trendlines, only to be denied and fall back down to the April 1 low of $6450, which actually left the channel for a bit.

Other movement of note includes the following:
> April 3: close ends at the upper bound of the channel
> April 4: rejection occurs at the upper bound
> April 5: low stops just a hair below the lower bound
> April 6: close ends at the lower bound of the channel
> April 7: rejection occurs at the lower bound
> April 7: high stops at the pink trendline
> April 8: high stops at the pink trendline
> April 9: high stops at the regression trendline lower bound

Frankly, I've been updating this idea so much because it's been so damn spot-on so far. The only frustrating part is that while this has accurately kept us on alert, it hasn't led to any winnings yet! It's tough to make money when the best course of action is to hold on a sideways-moving security.

While most of the others on TradingView are drawing charts suggesting you chase money -- which is a lost cause in recent days -- this chart has almost perfectly pinpointed the April price action for Bitcoin.

11 เม.ย. 2018

บันทึก

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12 เม.ย. 2018

บันทึก

2018-04-12, 8:50am EST

For the first time since 2018-03-28, Bitcoin surpassed $8000, but this happened very fast. In fact, BTC increased by more than 1K in price in just 40 minutes. So this doesn't count as a confirmed (re: sustained) breakout!

The good sign is that Bitcoin has broken through the two trendlines for now, and it currently rests around the pink trendline upper bound. What happens in the next 12-36 hours will be very telling.

Altcoins had a huge day yesterday, and now Bitcoin had a huge morning. But since, regression has settled in to mitigate gains for the holders. Depending on the coin, there are technical arguments that suggest some more regression is coming. In this case, the BTC %R is around negative-21, which means it is approaching an overbought status on the daily chart. The RSI, which is generally less aggressive but more reliable of a measurement, only has BTC in the lower 50's. This is actually a positive technical indicator for some, as certain investors use the "crossover" of RSI past 50 to start buying or selling. However, it is very important to note that today hasn't closed. We're still 11 hours away from that, so the %R and RSI aren't set in stone. Again, what happens next will be very telling.

If you slept through the spike from 7:00am EST to 7:40am EST, do not worry. You should still be on ALERT to BUY here. Once there's confirmation that follows BTC leaving the trendline channel, then you can BUY away!

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13 เม.ย. 2018

บันทึก

2018-04-12, 11:00pm EST

Bitcoin closed above the pink trendline channel! Also, Altcoins had another generally good day, with several coins increasing price by at least 10 percent. In other words, we have enough evidence to suggest it's time to BUY.

For those looking for a bit more analysis, perhaps due to a fear of the bears fighting back and taking this thing back into the pink trendline channel, I will be making another post analyzing what's going on as it relates to my two trendlines.

As for this post, it's time I close shop... until next time, my best to you, as we trade!

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