Arbusers

This thread is only for those interested in Bitcoin analysis and investment strategy. I will use a blend of technical analysis, Elliott wave theory, behavioural investing, value investing and market sentiment. My investment mentality in cryptos, like stocks, is to understand the cycles of the market and try to get advantage of the circularity. Thus, I am looking for mid to long term positions. a smaller portion of my portfolio is dedicated to smaller time frames, but I decided to keep these smaller time frames out of this thread, to stay focused on the big thing and not the day to day game. Keep these in mind so you better understand what I am talking about in this thread.

Like always, in this thread I am describing what I do with the funds that I invest. These are personal and corporate funds. I am not telling you what to do or not what to do. I have skin in the game, and I am not doing this for clicks and views. I do not earn anything from that. I am not looking to confront anyone, and I will not accept personal confrontations in this thread. I will stop posting when I don’t feel to post, or when I don’t have time to post. It is not my duty to post when I don't have the mood or the time. Read the disclaimer at the bottom of the post.

To me, there is nothing bullish in this market mid to long term. The all time highs are already in and I am studying the market in order to find the next mid to long term entry points. Let’s see what the current technical analysis looks like and what I expect to play out at this point in time.


The price is simply ranging within the limits of a very well defined channel that you can see in the photo. Even though the channel is ascending, this is not a bullish formation. Technical analysis says, there will be a time the price will brake down to make a stop at the recent bottom around 35.000$ (all prices are in USD). It could range at this price a little bit, before moving down again, at an equal deep to the height of the channel. That would bring the price down to 28-29.000$ where a bigger support is located.

In these formations, it makes no sense making time predictions. The price could stay in the channel until it irritates everyone, or, it could brake out just now. Don’t take for granted the time frame as it unfolds from my lines and arrows. Only the Y axis counts accurately in this photo.

I have different metrics for the time axis, but let’s not blend things when there is no need to.

A legit question would be, is there any possibility to be wrong and new All Time Highs happen very soon? The answer is Yes, but realistically, the possibility of new ATH any time soon is really low.

I hope you enjoy this thread and we all become better humans by exploring the markets and our selves. In the end, I hope we all become wealthier too.

Information is not intended to be and does not constitute financial advice or any other advice. Information is general in nature and is not specific to you. You should not make any decision, financial or otherwise, based on any of the Information without undertaking your own due diligence.

Thank you very much for commenting on Bitcoin. I appreciate what you do to the maximum extend.
I had a look to various Youtube channels today and guess what, they were all with no exception highlighting the same channel. Every Youtuber had a different interpretation bullish or bearish.
So my questions are these:
1. Would you consider the 28-29K region as the final bottom before going up again?
2. You presented 2 legs down after the channel is broken. What is the theory of technical analysis saying in these cases? Is it just 2 legs down, or is it something more than that? A wave up, or an additional wave down to close the formation?
Again boss, thank you very much for the insight and the time you spent for us. I have been benefitted from your previous BTC and ETH analysis and feel very much thankful.

does elliot waves works the same when global currency usd has inflation 2% or 12% or 120% p.a ? i think no.

@neopas
Don't get fooled by Youtubers, it is all about clicks and revenues. Don't be their product. I estimate that only 1% of Youtube channels have something decent to say.
1. No.
2. The theory anticipates more legs. However I don't want to go far in my analysis as I am still talking about the mid term. We will have the time and the posts to talk more about the current bear market.

@nahcarts
I find the Elliot Wave Theory NOT working in the cryptosphere short to mid term. It simply doesn't work. However, It works perfectly fine in the long term and it provides a very good estimation on where and when we are going. Gigantic inflation is not rejecting the Elliot Wave Theory, because there are analogies (i.e 423%) that serves the theory fine and at the same time could bring charts to huge legs up and downs.

The channel is now broken. And what a surprise, what a coincidence, it was broken the very day (+-1 day) I pinpointed in my graph some 20 days ago.


I believe it worths it very much to explain where we are in the grand scheme of the cycles. I see people being confused and I am sure everything is cleared up once you know exactly the phase of the cycle. This might be my next post soon.

Information is not intended to be and does not constitute financial advice or any other advice. Information is general in nature and is not specific to you. You should not make any decision, financial or otherwise, based on any of the Information without undertaking your own due diligence.

Thank you Arbusers for the great analysis of yours!! Just my 2 cents. Bitcoin has huge correlation with NDX (Nasdaq) which basically has transform BTC to a proxy asset of it. If this correlation does not be eliminated, for whatever reason, it is possible to see BTC price under 20K if NDX drops from 12700 to 10K. I calculated based on the assumption that every 1% move of NDX is 2% move for the BTC. The correlation is in the range of 0.85-0.95. I am very sad about this fact, but i have to accept it and organize my portfolio based on this. Thank you again for your analysis.

Thank you makarid for the comment. I am always happy to see comments from an expert like you.
Unfortunately, these are the times that BTC is indeed correlated to the stock markets. Crypto enthusiasts asked for institutional investors, now they have them, together with all the good and the bad things they bare.
In my view, the correlation right now is 70%. I am noticing there are periods of high correlation, and periods of low correlation. I really can't figure out what the mechanism is that brings and pushes away this correlation. It is a mystery for me.

I will now present my argument on where we stand in the cycle. You should be coming back again and again in this post whenever you are not sure about the market. This post will set the big picture, let’s call it the macroscopic picture of the Bitcoin market.

The ATHs are in, and the cycle finished on April the 14th 2021 at the top of 64877 USD. Now, one might wonder why don’t you count the top of November 10th 2021 as the end of the cycle. After all November’s top was 69.000, much higher than April’s top.

The reason why I select April’s 2021 top as the end of the cycle, is because most technical indicators highlight April as the top, and not November. There is strong confluence for that. In addition, November’s top (69.000) is simply telling us that the next ATH of the current cycle will be above 69.000$. So now we have a floor for the next ATH, we know it will be higher than 69.000.

So why do we have this anomaly? Simply put, the answer lies in the immaturity of the market. I am pinpointing the green arrow in my graph, this is the day when Musk, Wood, and Dorsey came out publicly to support Bitcoin. Immature participants of the market took under consideration their appearance and boosted the price of Bitcoin, bringing it up to 69.000.

I myself was also lured to re-buy BTC, based on the technical indicators that for some weeks turned bullish again. That was a mistake that made me pay a low one digit damage, not being able to time the top once again.

Will these 3 people come out publicly again when (not if) Bitcoin goes again at 29800$? I believe they will not, because most probably they already sold their bags to the immature at the desired price.


So what lies ahead?
I expect the next halving event to take place in April 2024. For a number of reasons, Bitcoin tends to be at its fair price plus/minus some thousands at the day of the halving event. That means we will see a bottom before April 2024. Bottoms are usually ‘’a process’’. That said, we might see capitulation events, but adequate time will be given to the prudent investor to buy Bitcoins. This time of the ‘’bottom as a process’’ will be somewhere between now and April 2024. My indicators show that most probably it will be within 2022, but we will be here to comment again. We can very loosely calculate the fair price for Bitcoin for April 2024, but allow me to keep this calculation for a future post.

The task of this thread is to identify the best times to purchase Bitcoin. You already know that I selected the Dynamic Dollar Cost Averaging (DDCA) technique to buy Bitcoins. I will then take full advantage of the new cycle in order to sell my Bitcoins again to the irrational. In order to identify the best times, I will use my custom made indicators, pretty much similar indicators that helped me in the past.

This is not an easy market.

Information is not intended to be and does not constitute financial advice or any other advice. Information is general in nature and is not specific to you. You should not make any decision, financial or otherwise, based on any of the Information without undertaking your own due diligence.

Well, I really hate to say ''I told you so'', but, I told you so.

As I described in the first post of the thread, the price is now a little bit lower than 35000$ which was our first target based on the formation of the ascending channel which is now clearly broken. The price could range a little bit at these levels (or completely ignore them), before continuing its path towards the 28500-29000$ levels where we expect a bigger battle to be given.


I see no reason starting DDCAing Bitcoins at these levels, as there is no credible sign we are anywhere near an important bottom. Again, Bitcoin price would irritate everyone until it reaches the desired levels.

I hope you find this analysis useful.

Information is not intended to be and does not constitute financial advice or any other advice. Information is general in nature and is not specific to you. You should not make any decision, financial or otherwise, based on any of the Information without undertaking your own due diligence.

Thank again Arbusers for the follow up post on BTC! From my experience on the crypto market, if someone has a price target on his mind about a crypto, it is good idea to put a limit order with a few % points below this target in order to capture an extreme liquidation event and get much better entry price. When the liquidation event happens it will not be possible to create this limit order because the exchanges will get a flood of orders from bots (most of the time they crash for a few minutes or hours). Most of crypto exchanges do not have mechanisms to avoid such events (yet), because of their design and their global market nature. Maybe some members find this info useful.

I wanted to update you on the current situation. Frequent updates is not a task of the thread, but I decided to spend some time.

The market denied to spend time by ranging in the previous support levels of 34800$. On the contrary, it cut these levels like a knife cutting the butter. The market is speaking to us and it is our duty to interpret what this speech is about.

In my view, there is a very strong trend in a hurry. This is a hint about the final bottom of the market that might be lower than most people expect. So for now, what the market is telling me, is that some very much lower levels will be met in the future.


Of course, as previously said many times, I expect a battle at the levels of 29-31K. A swing trader would take a long position there, hoping to capitalise in the days to come. I decided not to take this position (and not to take hopium) and I will explain why I am willing to let some profits go.

As I said, the trend is in a hurry. What if the composite man knows that all people will take positions at this level of 29-31K and decides to crash them all? This is a battle I am not willing to fight, and I will let others do this job.

Who are these others?
Microstrategy has an average purchasing price of 30.000$. What will happen if margin calls start ringing? A trojan horse as many people say?
Last time the price went that low, we had Musk, Wood and Dorsey coming out to support the price. Where are they now? Do you suspect why they don't come out now? I will tell you what I think...they sold their bags and they don't care.

Information is not intended to be and does not constitute financial advice or any other advice. Information is general in nature and is not specific to you. You should not make any decision, financial or otherwise, based on any of the Information without undertaking your own due diligence.

Dear arbusers,

How would you explain that BTC dominance has not gone up yet although BTC has been putting in lower lows?

The long-term investors keep buying bitcoin because that is the only reason this asset class exists. This leads to dominance going up, which will eventually support the next bull market. The market can will not be healthy until the BTC dominance goes up. Cannot imagine the market going parabolic with such low dominance by BTC.

What is the invalidation criteria here?

If dominance is still at 40-44%, then has the market fundamentally changed?

Thanks

Hello Eleftherios and welcome to the forum.

One of the things that I am observing in this current cycle, is that many things are NOT the same compared with past cycles. For example, the fact that I earlier highlighted, of having an ATH at the very beginning of the cycle. We can't use past cycles as a blue print for the current.

I agree the biggest the BTC dominance, the healthier the market. We need a bigger dominance and the levels of 40-44% are not a sign of good health. By now, theoretically, we should already have seen a spike of BTC dominance together with a wreck of Altcoins market. This is not happening yet. What is happening is a wreck in many altcoins (others call them shitcoins) below the top 40. But most popular altcoins are standing very well in BTC terms.

I will give my explanation why is that, but it could be considered dubious as I am not able to support it with data, it just derives from the market sentiment that I have. This is the 5th (and the weakest weapon) of my arsenal as described in the 1st post of this thread.

The corrosion of the market is so big that many irrational participants do insist in investing in Altcoins. At the same time, there is a phenomenon that we observe in the stock markets where the nemesis starts from SPACs, moving to low quality stocks, then jumping to Russell stocks and in the end they take down the ciscos and the amazons. It might be the same in cryptos. They start with shitcoins, they move to top40 altcoins, they jump to ETH and then they take down BTC.

But things could evolve differently, starting from shitcoins, moving to ETH, then jumping to BTC and in the end taking down the top40 altcoins. No-one knows, and I wouldn't support any decision on any past behaviour as a guarantee to the present times. This is dubious and I wouldn't bet a single penny to this hypothesis. Let the market show us what is happening.

Information is not intended to be and does not constitute financial advice or any other advice. Information is general in nature and is not specific to you. You should not make any decision, financial or otherwise, based on any of the Information without undertaking your own due diligence.

Well, I really hate to say ''I told you so'', but once again, I told you so.

From the first post of this thread, when the price was at $41.200, we set a target of $28.000. This is a move of 32%, that was achieved today already. At this time in the market it worths saying the following:
1. The downtrend of BTC is in a terrible hurry. This makes me believe there is a LOT more free fall to come.
2. It remains to be seen if these levels of $28-29.000 will be an important battlefield or not. Let's see if someone gives the fight here. If no-one is willing to fight, then we have further evidence of the terrible hurry of the market.
3. Last time we had these prices back in 2021, we had the holly trio of Musk, Wood and Dorsey, coming out supporting Bitcoin. Where are they now? Well, you guessed it, they sold everything to the irrational and there is no need for them to support anything anymore. Well done guys.


This terrible hurry of the downtrend makes me believe it will be very much difficult to set price targets based on classic technical analysis. We might identify lines, flags and channels later, but maybe it is about time to think on the X axis, that is time, and not only on the Y axis, which is price.

The channel that we formed from the first post of this thread creates different steps down the hill. I presented 2 of them that are already materialised. Classic technical analysis speaks about 1 more leg down. I will need to see if any battle will be given here, before speaking about the final target of the channel.

To sum up, we now work on both X and Y axis' to identify the process of a bottom.

Information is not intended to be and does not constitute financial advice or any other advice. Information is general in nature and is not specific to you. You should not make any decision, financial or otherwise, based on any of the Information without undertaking your own due diligence.

To better navigate to the markets, you have to read and understand the story of Ulysses and the Sirens. Never heard of it, too pity for you. Go read it now, it is never too late.
You are Ulysses. The Sirens are everyone else with an interest in the market. Jim Cramer, CBS, CNN, Musk, Wood, Facebook, the FT, Youtubers, activists, you name it.