BTCUSD bubble poppin idea
Diupdate
Hello TV, came across some similar ideas on this platform today. I modeled my idea off various references and I will try to explain the different sources as I go along. As a note, I am just starting in this space and this is my 2nd published idea. I'm currently trying to learn as much as I can about the crypto environment and technical analysis as I go along. I really appreciate any comments and feedback!
The base for the model revolves around an image depicting the stages of a bubble: people.hofstra.edu/geotrans/eng/ch7en/conc7en/img/stages_bubble.png
Following the image I labeled some important moments such as the 'take off' and 'first sell off' locations. I believe we are currently in the mania stage and experiencing both enthusiasm and greed, which sounds just about right coming off the tongue.
After that I tried to get a little more technical, which is near impossible during these highly speculative times. The timings between the stages in the image match pretty well with a couple of things. The cycles that Bitcoin has started to form come in roughly 60 day increments. The previous cycle includes the run up from 3k to nearing 8k and includes the correction down to 5.4k. The current cycle encompasses the current all time high and will likely reach even higher highs. It also contains the CME futures release within the first third of the cycle.
Speculation alert: as redundant as that 'alert' is it's an emphasis as to murky waters that Bitcoin futures reside in. Now, I think it may be possible that all these Bitcoin-hating institutions will think bitcoin is over extended at it's highs on the 18th. From that assumption one could see the possibility of many large short positions being placed against Bitcoin. Furthermore, from the BCH fiasco we should have learned how easy it is for a few deep pockets to manipulate our young, shallow market. With a few clicks of a mouse massive sell orders could be placed and drive the price down, snowballing into a large 50%-80% correction. This once again coincides with the end of the 60 day cycle at which prices will start to cup and return up to the 200 day and large institutional buyers will scoop up loads of cheap cheap bitcoin, and bid on the futures increasing in value for double the gains!
I want to acknowledge that I'm very bullish on Bitcoin and crypto long term and I see this correction as a necessary evil. The current growth right now is not sustainable unfortunately. Whether the bubble pops during this cycle or in one of the upcoming ones, it will pop, and the market will have to readjust. Every other coin, stock, market, you name it has deep corrections that allow a stronger and more consistent growth pattern to emerge. I think 2018 will be a killer year for bitcoin and crypto and this potential correction could be just the start it needs to reach astronomic levels.
Other reference: reddit.com/r/Bitcoin/comments/7d964e/1987_stock_market_crash_and_bitcoin/
The base for the model revolves around an image depicting the stages of a bubble: people.hofstra.edu/geotrans/eng/ch7en/conc7en/img/stages_bubble.png
Following the image I labeled some important moments such as the 'take off' and 'first sell off' locations. I believe we are currently in the mania stage and experiencing both enthusiasm and greed, which sounds just about right coming off the tongue.
After that I tried to get a little more technical, which is near impossible during these highly speculative times. The timings between the stages in the image match pretty well with a couple of things. The cycles that Bitcoin has started to form come in roughly 60 day increments. The previous cycle includes the run up from 3k to nearing 8k and includes the correction down to 5.4k. The current cycle encompasses the current all time high and will likely reach even higher highs. It also contains the CME futures release within the first third of the cycle.
Speculation alert: as redundant as that 'alert' is it's an emphasis as to murky waters that Bitcoin futures reside in. Now, I think it may be possible that all these Bitcoin-hating institutions will think bitcoin is over extended at it's highs on the 18th. From that assumption one could see the possibility of many large short positions being placed against Bitcoin. Furthermore, from the BCH fiasco we should have learned how easy it is for a few deep pockets to manipulate our young, shallow market. With a few clicks of a mouse massive sell orders could be placed and drive the price down, snowballing into a large 50%-80% correction. This once again coincides with the end of the 60 day cycle at which prices will start to cup and return up to the 200 day and large institutional buyers will scoop up loads of cheap cheap bitcoin, and bid on the futures increasing in value for double the gains!
I want to acknowledge that I'm very bullish on Bitcoin and crypto long term and I see this correction as a necessary evil. The current growth right now is not sustainable unfortunately. Whether the bubble pops during this cycle or in one of the upcoming ones, it will pop, and the market will have to readjust. Every other coin, stock, market, you name it has deep corrections that allow a stronger and more consistent growth pattern to emerge. I think 2018 will be a killer year for bitcoin and crypto and this potential correction could be just the start it needs to reach astronomic levels.
Other reference: reddit.com/r/Bitcoin/comments/7d964e/1987_stock_market_crash_and_bitcoin/
Catatan
bloomberg.com/news/articles/2017-12-04/the-next-big-short-hedge-funds-prepare-to-trade-against-bitcoinArticle released this morning that speculates institutions may be net bearish and short the futures contracts on release.
I did however just now learn that the Cboe will release futures contracts on the 10th of December, a week earlier than CME group will. These contracts will also have a lower limit requirement (1 BTC per contract vs 5 BTC for CME contracts) which may draw in smaller investors and allow them ability to short (or go long) on contracts. The main implication of this is that it throws off my time table, will be an interesting couple weeks no doubt about that.
Catatan
Kind of crazy how closely it's lining up over a month later. I think a range of about $7,800 might be when the bears are exhausted and bulls take over.Catatan
Check out my updated version of this idea here: 
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