Analysis for BTCUSD: a global view

11 Jun 2018

BTCUSD

A thorough analysis for Bitcoin and the most relevant scenario for the cryptocurrency’s near future.
In this post, I applied the following tools: candlestick analysis, all-round market view, market balance level, oscillators, graphic analysis, trading volume.
Dear friends,
Yesterday, June 10, we all witnessed the deepest Bitcoin drop for the recent time. What will be with the Old Chap next and what should BTC holders do? Try to find out.
First of all, let’s speak about the reasons for this crash.
Many associate panic sales with the US Commodity Futures Trading Commission’s (CFTC) investigation of possible manipulations in the cryptocurrency market.
I tried to find the original source of this information and have discovered that the earliest reference to this dates back to June 8, made by THE WALL STREET JOURNAL.
However, I’ve not managed to find any information on the official CFTC twitter. OK, let it be.
The investigation of manipulation was discussed as early as in January, when the regulator had suspected that CME Group Inc (the first platform to launch Bitcoin futures) didn’t have enough information to monitor wrongdoing in the cryptocurrency market.
Anyway, the news is quite old and can’t be the reason for this strong drop. However, this fact hasn’t prevented manipulators to take the use of the news.

In my previous article Bitcoin on the Edge, I’ve already said that it costs manipulators too much, to move the price only by means of trading volume and they will look for any information reasons to dump the quotes despite the general positive background.
And this situation certainly looks like a manipulation, hidden behind the news negative. What is the real reason for the drop is the huge dump, organized by big traders. It is clear from the chat that from 5 p.m. till 6 p.m. GMT, there was abnormal dump of coins; that pressed the market 95% down from the total length of the correction. After an attempt to retrace the price, there was another dump, resulted in that the manipulator made sure in the market strength and took a break.
Now, we see the whales’ true intentions, who want to out crowd from the market as much traders as possible.

Currently, manipulators seek to persuade everybody that the market continues trading down. The only have to make one small step and break through two strong support levels, 6425 USD that is April’s low, and 6000 USD. After that, the market will lose its support; the last hamsters will believe BTC to be down at 1000 USD.
However, if think straight, the manipulators don’t look almighty and able to drop Bitcoin down to such lows. The market laws are true not only for the rise, but for the fall as well.
The market can’t grow without sellers, just like it can’t fall without buyers.
That is why, to dump the market down to the desired level, big traders have to drive the price up and down, changing so the market sentiment all the time.
I don’t think that article in the WSJ to be a puff piece, and if you read it cool-headed, it doesn’t suggest anything that bad. CFTC always monitors the futures market on the US mercantile exchanges; and Bitcoin futures are like any other assets.

11 Jun 2018

Catatan

The cryptocurrency gradually becomes a part of global financial system that is ruled by civilized, transparent laws, which suggest public reporting and going through audit. It is a norm for civilized market!
Even if CFTC discovers any manipulation, what's then? Will cryptocurrency disappear? Will the exchanges be shut down? Will cryptocurrency and blockchain-based networks lose its advantages and stop working?
Of course, NOT!
I won’t be surprised if this story is exploited to make all hodlers capitulate. Moreover, don’t forget about the investigation of the Tether case that was, in fact, covered up. Nothing prevents this news bit from being recalled in the context of verification or audit, initiated by the regulator.
But that is about my own assumptions…
Let’s see, what technical analysis suggests.
In general, I can’t say that I was greatly surprised by the recent drop.
When I was writing my previous forecast, I had a feeling that everything might not be as simple; as the prediction I had made almost 100% fitted the sentiment of the majority. As know, the majority can’t gain on the exchange.

Finally, the price went a completely different way, drawing something like this:

In the end, as it is clear from the chart above, the market broke through the triangle’s bottom leg at almost the point I had suggested the ticker touch, with a difference of a few hours (blue star in the chart above).

If you look at the monthly timeframe, you’ll see the broken out support level at 7040 USD, that is now the resistance level.
From below, there are support levels at April and February lows, at the levels of 6425 USD and 6000 USD.
I recommend those really faint-heated to be prepared to level 5800, as that is where the market balance level, based on Keltner channel, which the market will tend to in bears go ahead. I don’t think it go lower without any serious rollbacks up to 7000 USD-8000 USD

.If you look at the weekly chart, you’ll see that the ticker has already hit Keltner channel’s lower border; and bears are now trying to test the strong support at the current levels.
According to the chart history, the price never touched the lower channel’s border without rebounds. Moreover, we see, in fact, the new cycle starting with the peak at about 0.618 from the previous bullish wave’s top.

Oscillators are also at the indicator window bottom borders, which suggest the further fall be strongly limited.

In addition, there is MACD bullish divergence emerging in the weekly timeframe. It indirectly signals a possible Bitcoin rebound.

11 Jun 2018

Catatan

The daily chart also indicates bullish convergence for BTCUSD.
I think the last argument for the fall to be false is the comparison of Bitcoin trend with other altcoins. I took Ethereum as an example.

If you look at the chart above, we see from the ETHUSD example that most altcoins didn’t support Bitcoin’s drop, although they had drawn down under its pressure, didn’t renewed their lows of May 28. This divergence indicates the cryptocurrency correction is local and resulted from exceeded pressure on Bitcoin itself.
Summary:
There are now fundamental threats for Bitcoin. The downtrend is local and limited by levels 6400, 6000 and 5800.
It will hardly move lower without a significant retracement.
Moreover, NASDAQ launching its cryptocurrency exchange can well boost a new up-wave. The market just can’t ignore this event.
Therefore, a global scenario looks like this:

Simply put, the ticker is at the stage of the new cycle emerging, with the top at 8600 USD.
But I’m afraid that, if this idea is supported by the majority and spread everywhere, manipulators will have to invent something extraordinary; so don’t show this chart to anyone, let it be our little secret

I wish you good luck and good profits!
Regards,
Mikhail @Hyipov