Short Term Update: congestion @bitstamp

chartThe situation is congested, I resetted the VWAP  lines using the last two days to have a picture for the very short term. The RSI oscillator is also congested, it not being overbought or oversold.
In these cases, you have to wait for something to happen to understand what the market wants to do. A possible trading strategy may be to buying bitcoins at the break-up of the VWAP at $ 910 with a profit taking around $ 940, a quick trade for a small profit.

This market is stabilizing above the important midpoint level of 650$ and as long as it stays above it i’m willing to believe that it is slowly preparing itself for a further upmove, probably to $1300-$1400.

17 thoughts on “Short Term Update: congestion @bitstamp

  1. Mike

    Thanks for the reply regarding the low volume in the last bounce from the Bank of China driven dip below 600. All in all that was a very healthy drop with a good volume.

    I took a glance at your old posts… May 2011, Dec 2012, March 2013, etc. They were a surreal visit to the past of bitcoin. What a diary! What a wealth of history you must be carrying and your frequent technical diaries are very much appreciated.

    I am quite new to bitcoin though not new to trading. I look forward to reading your terrific analyses…

  2. Well, without the bad news, it couldn’t break above $1,200, volume dropped down to nothing above $1,100, why do you expect it will succeed this time, when it couldn’t break even $1,000 last couple of days? I’m not sure why nobody in the media mentions that Korea followed China? Well, people share only the news that serve them well.

    But you’re right – people are waiting for more bad news to continue the sell off. Some who want to exit the market still want to sell above the psychological $1,000, I guess, but if they run out of patience (and when there’s no indication for BTC to break back above $1,000), they will close their BTC positions to close the year with a positive fiat balance.

    1. Enky

      It will go above previous top because the underlying trend is still positive, sooner or later. Don’t forget that secondmarket is pumping money in to the system. Next year it will be above $1200.

      1. SecondMarket is making some bold self-serving statements, I know. They already pumped money into it, I’m not sure if it will be that easy to attract more capital when the slightest bad piece of news results into a 40% drop. November was a good month, but this doesn’t mean every following month will be like November. On the contrary, the whole Bitcoin thing start to smells more and more like DotCom 2.0 and people are starting to finally recall all the media-fueled hype from back then that made people put all their savings into vaporware stocks and lost most of it. I know many friends who thought they get the stock market, well, everybody “gets it” while it’s only going up. Anyway, we’ll see. I think the flow of institutional money into Bitcoin goes against the idea of Bitcoin so I see even early supporters having second thoughts about its future now.

  3. Mike Lee

    The chart reading is clearly pointing to the upside. The upside trend has never been broken. With each major rally, the chart shows increasing confidence in the traders that the trend is intact. We are firmly in the consolidation phase after the major run-up and processing the BofC news. If you are willing to look, there is a critical mass forming in terms of the Wall Street and venture capital interest in bitcoin, intrastructure startups, and businesses eyeing opportunities in accepting bitcoins for services and products. For the gentleman mentioning Korea, Korea is not a big enough of a market to make any difference. Switzerland, where banking is the oldest and biggest industry, is eyeing to take a leadership position in bitcoin market. That is news. The fact Paypal is making it clear that it considers bitcoin a serious contender in their business turf is news.

    Enky’s perspective is enormousely appreciated for having watched and traded bitcoin for the past 2+ yrs.

    1. Switzerland isn’t going to make any difference anytime soon. Korea is a growing market and it was bad news. Regarding PayPal – he said it’s not currency and they’re not gonna implement it anytime soon. He also said he owns BTC, so, it was a baseless self-serving statement, if you ask me. Regarding Wall Street – you didn’t read Fidelity’s denial?

      1. Just because you’re holding (expensive?) BTC, doesn’t mean I’m trolling or not saying the truth! I sold all my coins above $1,200 to the greater fools and I’m keeping my USD for now as the stress from all this doesn’t justify the profit, which I can make less stressfully elsewhere! The long-term trend might be slightly upward, but the short-term is the opposite (Enky expects a drop below $500, which I also hope for). Also, I might be a troll, but only an illiterate idiot can discount South Korea! And it’s now clear that nobody will recognize BTC as a currency with the European Central Bank, Norway, Australia, and New Zealand’s recent statements. But don’t let your hopes die! Only keep in mind that speculators don’t need huge swings to make solid profits. Many would rather have ten certain $50-margin transactions than hope for one at $1,000 like amateurs do!

  4. In the event of a -1 dev line breach, where do you think we’ll land Enky? There’s currently a lot of bids 800-830, and a 750 btc buy at 780 $, and the next big bids after that are at 690 $. Not saying they won’t hold, but just last week we dipped to 549 $. Few saw that one comming.

  5. alphadragon

    Hi Enky,

    What platform are you using to get the VWAP indicator? Are you pulling the data yourself (from where?) and then using what charting software? Also, I’ve noticed all your charts are based on BitStamp. But the other exchanges have different prices (gox, btce, btcchina), so psychologically round levels (900, 1000, etc) would be different from exchange to exchange. What is your take on that?

  6. Jukka Santala

    Trading at least on MtGox still leaving little gambling aftertaste; the trend is generally upwards, but there are some sudden large dumps below market value. Yesterday saw two instances, the first one seemed to jump-start the rise from the congested state, second was at 910 dollars just when I was preparing to sell, someone dumped maybe 500 BTC total with price down to 850. Panic sells brought the price further down to 835 which triggered my stop-loss; naturally the market price immediately after that recovered to 900. I decided to wait for another big dump, but it didn’t come and the price enjoyed brisk rise overnight. Which just goes to show… I still don’t understand the market 🙂
    Now MtGox seems to be trading just around +1 monthly standard deviation currently, which nicely co-incides with +1 daily standard deviation. I wonder if that’ll cause another larger downturn, though there’s been a few incursions to +1 daily stardard deviation today.

    1. Enky

      I hope it will happen another big dump down to 400$ for then rebuying massively. crossing fingers.
      it would be perfect to shakeout all small and inexperienced speculators that are buying right now with too much euphoria:) usually the market forces punish those kind of speculators

      1. Jukka Santala

        Well, they certainly punished this one 🙂 But then I wasn’t looking to speculate as explained elsewhere, just trying to cash out while the price was high, before learning MtGox has endless waiting lists before you can get your money or Bitcoins out. So now I am looking to speculate… And that said MtGox seems to have met the daily +2 standard deviation and RSI still doesn’t seem sure if the current upturn has ended so I guess there’s much force in this upturn. If BTCChina gets past 5600 line I’m not sure anything can hold it for a while. But we’ll see.

  7. pieter

    Waiting on weather… no news, good news! Bitcoin continues being adopted for more and more people, so don’t be in a hurry. Keep calm… Moreover, it’s still more expensive to buy bitcoins than to sell them, so…

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