Long Term Update

As i thought the trading range has been broken after 30 days, it’s very unlikely to see more then that for a market congestion and with no exception this market respected this common rule. For the majority of the time prolonged trading ranges resolve with a strong break to the downside once the smaller trading ranges are broken.

chart

I’ve now two support levels, 640 and 515 dollars for the short term and i think that in this price zone some buyers will show up. For the long term supports are on my long term VWAP ($400) and the 200 days moving average now at $420.
Many are arguing that we are falling because of MtGox, i don’t agree with this view, it’s just an excuse to sell we all know that MtGox is out of business since months. When the market is in low sentiment regime good news are ignored and overreactions to bad news from investors are common.

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16 thoughts on “Long Term Update

  1. Mike

    Well said. Mtgox has been dead for month for the obvious reason. That is no news, for sure. Your assessment is spot on. The current “sentiment” is mostly technically driven. Days will return when even bad news will have no effect on the upside. I’m just a bit peeved that the best trading opp recently occurred during my sleep….life goes on.

    1. bito

      I’m not sure what timezone you are in, and thus what “sell off” you are referring to. But it is clear to me that the current downtrend was because of BTC withdrawal issues from Gox.

      Buying pressure began to ease late on Feb 3, Gox acknowledged the issue existed on Feb 4 (https://support.mtgox.com/entries/26128504-Update-Statement-Regarding-BTC-Withdrawal-Delays).

      At 14:30 JST on Feb 7 they released a statement saying BTC withdrawals were being suspended (https://support.mtgox.com/entries/26130949-Statement-Regarding-BTC-Withdrawal-Delays-UPDATE). Guess what happened next. 820 to 650 in 8 hours.

      The simple truth of the matter is that the market is always looking for any excuse to move in a particular direction. Market congestion indicators should not be ignored, but they should not be heralded as the reason why a market turned. Price would have fallen today even if we were not in congestion.

      Gox price has reached parity with Stamp, this is a good time to buy if you have cash on Gox. Huobi is higher too – no bears in China.

      1. BK

        Is it possible that the cause is not technical issues, but that the exchange does not have any BTC and USD left?

      2. usd no it’s impossible, it’s only possible if kerpeles used the customer money for his luxury living
        btc is highly possible, a bug, a problem and the btc has eventually be sent to an address that they don’t own the private key:) would be hilarious

      3. Mike

        I concur with the Mtgox reason for this drop. There is no doubt now that the drop is being led by Mtgox, falling below bitstamp! Volume is still not great so it does not feel like a panic bank run but getting close. The only question is why the hell are other exchanges also following Mtgox down the chute? This is the circus that need cleaning up with bitcoin. Have one or two big exchanges that are professionally run. I’m returning to watching the comedy.

  2. bito

    Of course it’s possible. It’s just not the most likely explanation. In fact it is more likely that people are making up the rumor that this is the case, than it actually being the case.

    Wikipedia’s page on MtGox has been updated saying that “As of February 6, 2014, the wherabouts of Mt. Gox’ CEO are unknown”, based on an article with a sensationalist headline.

    http://www.dcmagnates.com/40-million-in-bitcoins-on-the-brink-at-mtgox-while-ceo-is-still-mia/

    The author responds to a comment on bitcointalk acknowledging that “When writing that the CEO is MIA, the reference was to Mark Karpeles being ‘publicly’ quiet during a period of crisis at his company”

    https://bitcointalk.org/index.php?topic=451951.msg4977325#msg4977325

    I can understand the distrust of Gox and Mark, but it all has to be taken with a grain of salt.

    1. Mike

      a panic bank run is inevitable when a trading house does not let its account holders withdraw their money for this long. Then to even stop them from transferring their bitcoins to their own wallets with no end in sight? End of story in my book.

      1. Mike

        Two situations will present themselves:

        1. Another amazing trading opportunity during this panic selling.

        2. Fairly significant loss of credibility for bitcoin due to guilt by association with Mtgox.

        Hopefully, this situation will give a bigger push for a more professional and better funded exchange to emerge in the USA.

        Happy trading.

  3. Marco

    Envy do you think that today Gox news will drop 650$ wall on bitstamp or it will be a bounce to further high after gox dead? i’m wondering if sell or hold my btc…

  4. Elie

    Bad news: https://www.mtgox.com/press_re… Mtgox says that Bitcoin has a flaw/bug which would allow hackers to exploit it. Until it’s fixed than MtGox will not resume the transactions and withdrawals. They say other exchanges are affected too and that they are working with the bitcoin developpers to update the Bitcoin protocol.

    That’s it IMO for bitcoin the media is gonna destroy it tomorrow morning… value might fall to 100-200$ if not less. That’s a huge security flaw that might keep vendors, traders away of bitcoin and confidence will be lost for a while if not for too long.. This might also bring all the exchanges down to a HAL = mass panic.

  5. Bob

    So when you speak of a ‘long term’ VWAP, what do you consider long term? 200-300 days? Also, I understand you’re using a lot of statistics, but when you get a number like $400, do you ever step back and think, ‘well that’s rather unlikely?’ I have just about zero knowledge if compared to you but I do follow and read quite a bit. Sometimes I look at your numbers and just think blasphemy. I feel that unless there is a significant political event, BTC will not stabilize under or even near $550 again, and probably never go for less than $500.

    Also, I understand your discussion of market congestion, but I feel like some entity has been attempting to maintain the stable market price of the past 42 days. That’s a bunch of baloney I just said, but the congestion theory doesn’t quite sound right either.

    Anyways, thanks for all your analysis and input.

    1. i use last 8 months of data for long term VWAP; the 200 Day Moving Average is a long term moving average that helps determine overall health of a stock or index or bitcoin as well.A stock that is trading below its 200 Day Moving Average is in a long term downtrend. The stock is generally considered as unhealthy, until it breaks out above its 200 Day Moving Average, as long as it stays above this average bitcoin is in an healthy position.

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