Long term update: Bitcoin bottom is in

chartI attached here on the left a long term chart where each bar represents three days of market activity, as i said in the past this particular time frame is a good compromise between a weekly chart and a daily chart.
Despite the recent strong rebounce from my long term support around $420, the ALMA moving average is still pointing down confirming that XBT/USD is in a short term corrective phase inside a long term bull market because the price during last months has been always above my long term vwap, now at $430 and also above the 200 days moving average now at ~$470 and rising.

About volume activity the “volume ratio” indicator tell us that the situation is still very oversold and all the recent bearish news and the excess of pessimism among many investors let me think that probably the bottom is in but to avoid any risk before opening a long position is wise to wait a positive volume activity that should be back once a new uptrend is established and confirmed by the reversal to the upside of the ALMA moving average i use.

To conclude XBT/USD remains in a corrective phase inside a long term bull market, the rebounce should stop near $600 where there is the ALMA moving average to act as resistance level. Any strength above $600 could mean that the short term bearish trend is over and that this market is headed up again.

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40 thoughts on “Long term update: Bitcoin bottom is in

  1. Steffen

    Hi Enky,

    great analysis, thank you!
    One question: What do you mean exactly by “…let me think that probably the bottom is in…”?

    Do you think the quick rebounce already was the 420$ bottom? Shouldn’t it be at this level for a while in order to shake out all left weak hands and bring some silence in the market to build up new confidence prior to the next rise?

    1. Enky

      I mean that usually a bottom develop when there is an excess of pessimism against bitcoin in general, just have a look on all the stupid and bearish comments about bitcoin on forbes or yahoo finance or the wall street journal, a massive negative sentiment that let me think the bottom is done and past us, don’t forget also that the market is extremely oversold. In my opinion the weak hands already sold everything all the way down to $400, totally scared by mtgox disappearing togheter with bitcoin, an unfounded fear.
      The silence in the market is probably coming now allowing confidence to build up, this process it doesnt necessary need a new lower bottom.

      1. I think it didn’t go below as China didn’t react much and Bitstamp traders got scared and bought back raising the price quickly to over $600, but now we see China’s slow reaction.

  2. Arthur

    Again spot on, Enky, I’m more and more impressed by your posts. From the day I started trading 2 weeks ago, with an eye on your blog, I managed to extend my bitcoin position with 4.4 coins (+18%). At +5 coins I’ll do a donation, promise. 🙂

      1. Arthur

        You’re welcome, Enky. You know, when I obtained 24.7 bitcoins last year I had the idea ‘don’t look back, and see again in 5 years what’s left of it’. Hoping they would be worth something of course. I came across your blog in December, start reading it every now and then to get a feeling for what’s happening. Tried to read into the tech things like ALMA, vwap etc. And I used my guts feelings. So far I did 6 trades, with one goal: obtain more coins, only with the coins I already have. Sell high, get them back low. All 6 trades were successful, the best one being selling 5 coins for 655, buying back 7.4 coins for 425. This way of trading is pretty cool I noticed, since the average initial buying price per coin I own drops (I’m not adding extra fiat money, still using my last year one time investment) and when the price of bitcoin jumps up, I can now see 29.1 coins go up instead of 24.7. I’m amazed it worked for me, really. Thanks again for guiding me the way.

        Now let’s lookout for the next trade! 🙂

  3. B. Mums

    Enky, we’ve been in some heavy congestion the past 24 hours it seems. For the past 3 weeks, this has nearly always resulted in a large dip after a few days of congestion. Even though the worst news is behind us, do you think we’ll see jumps instead of dips for the foreseeable future? Or are big dips ($30+) due to congestion still likely as well?

    I also wanted to post and show my gratitude. I agree with the poster above, in that you are amazingly spot on. I have also had good luck trading lately and made some profit. I’ve sent a donation a week or so back but I’ll be sending another donation soon. 🙂

    1. Enky

      Thank you for you support.
      Well about the market i think that some hesitation is normal after a +50% move, from $400 to $610, bitcoin might do a correction down to $530 or so

      1. Weioo

        Hit 533 on BTC-E this morning…Once again, you were perfect. I set a buy-in last night for 547 to be safe, but from now on I might just go $5 above what you call as the minimum. I’m nearing my goal and once I hit, it I’ll share my profits with ya. 🙂
        Currently: 4.55BTC, Goal: 5.15BTC.

  4. Follower

    Hi Enky,

    first let me congratulate for your blog. It really helps a lot to better understand the BTC market and if I knew your blog before then I definitely make better decisions.

    I bought a huge amount of Bitcoin in the 950-1075 price range in the last December and in January of this year and I am seeking your advice about to what to do now.

    I expected that the BTC prices will rise again after a (more or less) short period of time and I kept my coins when the prices are crashed down. Unfortunately at the moment I do not see that this will happen in the near future.

    What do you think, what is the best way to minimalize my losses? Should I still stick to my coins in the current situation, or I definitely need to sell? What I mean is, if I should wait until the prices rise again in the 950-1075 region or I need to sell and rebuy in a lower rate to slowly gain back my losses?

    If I need to sell then what price range can be good to sell with the least loss of money and with the possibility to buy coins on a good price considering the current market conditions?

    Thank you very much for your advice!

    1. Enky

      Just Hold, in case of a bear market (with bitcoin network difficulty starting to drop) and prices constantly below 400$ then ok it’s wise to sell.
      For now hold.

    2. Arthur

      Not sure if you traded before, but if not, you could start trying with one or two trades for a very limited bitcoin amount and small sell-buy margins. It helped me to get over the first trading nerves a few weeks ago. My very first trade was selling at 650 and using the total $ amount to buy back at 640. It felt like a huge victory lol!

      Now I’m using 1/4 to 1/3 max of my total bitcoin position to trade, and as you might have read above, it worked out quite well so far. I bought at 550 last year, but with 18% more coins in possession currently, the average price per coin dropped to 470 now.

      Hope this helps, good luck!

  5. Andrea Chiavazza

    Some upward movements going on…
    I think this might be related to the release of bitcoin 0.9 that now seems to be imminent.
    This new release will have a temporary fix for the malleability problem, and will have the new payment system, that seems to be quite a big deal.
    The 0.9 rc2 has already been released. (release candidate 2)
    Daily commits can be followed here:
    https://github.com/bitcoin/bitcoin/commits/master

  6. Amit

    Hi Enky
    the price has just passed the $600, can it be because the ukraine -russia situation?
    can a start of a small war reverse the trend to bullish?

    Amit

    1. George

      Not really guys there has been a whale in bitstamp that poores closed to 4000-5000BTC since 8 hours ago till now, he just pulled out. Expect the prince to drift down slowly

      1. Arthur

        Except when this ‘whale’ has good reasons to believe the price will jump up soon. It happened also just before Gox declared bankruptcy. Someone dumped 5,000 coins in the 550-510 range (and probably picked them up at around 400 again a few days later, not sure about this though). Let’s see what happens the next few days…

      1. george

        The wall is back guys, its @ 589.78000 with 1725BTC. Since last night that same person or group invested 5-6 millions dollars in BTC. Someone wants Bitcoin to get out of the bearish quicker or some rich figure who is a solid believer of bitcoin? I say if this continues were going to the 600s in the next few hours. Thoughts?

        Edit: we just hit 600 and the wall disappeared.

    1. george

      thats it we crossed 620 and been there for a while, im buying guys whatever happens I will not regret it. We flipped bullish considering the technical analysis.

      1. Arthur

        Yeah. 660 on bitstamp a few minutes ago. Still a bit surprised as I expected a congestion lasting a few weeks more. My whole position was on Hold anyway, so I’m enjoying this ride as long as it lasts… 🙂

  7. george

    Hey Enky, what do you think of the latest claim of Warren Buffett: “Bitcoin is ‘not a currency'” published today March 3rd:
    http://www.marketwatch.com/story/warren-buffett-bitcoin-is-not-a-currency-2014-03-03?link=MW_latest_news
    He says “NEW YORK (MarketWatch) — Bitcoin is “not a currency” because it doesn’t meet the criteria of a currency, including being a store of value, said Berkshire Hathaway BRK.A -0.18% [s:BRKB] Chairman and CEO Warren Buffett. In an interview on CNBC Monday, the American business magnate said that he would not be surprised if bitcoin is not around in 10 or 20 years because it is used as a speculative bet. The price of bitcoin is inevitably based on the value of the dollar he said, which means that it is not a currency in and of itself. ”

    ——-

    now for sure he is gonna say that, Bitcoin threatens him and every elite’s, banksters’ ability to manipulate the economy for their own benefit. Bitcoin will destroy Warren’s Buffets investement in currencies, assets etc. personally most veteran investors do not like technology and new innovations, and prefer good old dollar and fiat. If you can buy from overstock and tigerdirect with bitcoin so it is a currency, not sure why he says it isnt. Also Max Keiser would not agree with Warren’s claim, Max claim that Bitcoin has a store of value and is a currency.

    1. Enky

      i think that Buffet is too old for bitcoin:)
      He is always recognizing too late new technologies, It’s older people’s attitude towards strong techonogical innovations

  8. George

    I need some help guys. I recently started trading with MT4 in BTC-e and after discovering experts I have been testing different settings and eventually got a great auto trader going, looking at long and short with plenty of trades but since I dont have a big account ($300) the profits are constant but very small and a bit slow, basically if the price moves up or down by $40 a trail stop kicks in and I must say backtesting and real time is quite good. But trading with a small account is kinda pointless… What trade style can you guys recommend? Large but few lots? One big trade per movement? Im a bit lost and any advice would be greatly appreciated…

    Thank you in advance. Thanks for your expert analysis Enky, always a pleasure to see a new post!

    1. Weioo

      Personally, I was trading anywhere between 2.6 and 7 bitcoins depending on how well I was doing. That being said, I’m was recently trading 4.5ish BTC until I took it off BTC-E last night. I’ve run into some FUD regarding BTC-E after reading quite a few articles, and knowing Andreas Anontoplous does not recommend their usage. I left 1.5BTC on there for the time being and I’m trading with that. I moved most my BTC back to Coinbase as I trust them far more than the anonymous BTC-E.

      I really wish there was an exchange I could trust. Gox had my info verified though I never used them. I read that the hackers may have obtained all that info. I know Stamp’s had a few issues themselves…I sure wish there was a purely transparent and trustworthy exchange. Until Stamp or BTC-E start these ‘audits’ they are speaking of in recent posts, I may be done trading.

      That being said, I’m SUPER SAD I missed out on the HUGE swings today, lol.

      1. Arthur

        So far I’m quite happy with Bitstamp. Easy GUI, very responsive support desk, hardly a bad word to be found online about them (correct me when I’m wrong!). Trading with almost 27 coins there, and of course I set up two-factor-authorization. So far no issues with (bitcoin only) withdrawals either. And they announce the appropriate steps forward, and stick to it, as far as I can see. So yeah, happy with ’em.

      2. Andrea Chiavazza

        Sometimes I get the impression that some people use exchange sites as a way to store bitcoins. That is completely unnecessary, dangerous, and against the spirit of bitcoin.
        Keeping bitcoins in an exchange site make you constantly worried about whether the exchange will fail or not. Some of them might succeed in building a good reputation for being reliable, but ultimately accidents and theft can happen to any exchange.
        Why don’t you store them in your own computer, or even better, in a paper wallet? The technical knowledge required to do that is very small.
        It can be explained with 2 lines. Suppose your address is 1F3kxRvQtYinAq88aUBN5Jh29cNLVsBGwj
        This is the command to type:
        bitcoind dumpprivkey 1F3kxRvQtYinAq88aUBN5Jh29cNLVsBGwj
        It will display the private key, for example for the address above it will print:
        5Jo7PZQeZJe6npCqXrScqporiqWkkjW1CsXVFqzByHVRVJ2zDwe
        Write the private key on a paper and put it in a safe place. THAT’S IT.
        Now you can even burn the computer that contained the private key, and you are ok as long as you don’t loose the paper.
        You will no longer care about any exchange failing.
        Keep on the exchange sites only the amount of bitcoin you need for the trade, send them to it just before doing the trade, and when the trade is done, withdraw them immediately back to your computer.
        If I remember correctly bitstamp only requires 3 confirmations, which means you can deposit bitcoins in 30 minutes. Unless you do some ultra-fast trading, 30 minutes should be good enough.

      3. Arthur

        @Andrea: thanks, that’s exactly the info I was looking for. I know you are right, in a way, about the risks. However, I choose to hold most (90%) of my bitcoins on Bitstamp and slowly move some profits to Coinbase for buying purposes, and most likely an investment in Ethereum.

        I treat it like I would have treated gold if I happened to have it: keeping it at home feels unsafe for several practical reasons, while keeping it at a trustworthy party feels safer.

        And creating that paper wallet will finish things off for me, so thanks again for the info!

    2. Arthur

      I’m still a newby in the trading world, since I did 7 manual trades so far in the last few weeks only. However, all of them turned out to be profitable, so I guess I’m either lucky, or some bitcoin angel is sitting on my shoulder lol! Seriously, reading Enky his blog helps a lot too.

      Anyway, I still have to find my style, but what made me feel comfortable the most was trading with 1 or 2 big chunks, the total ‘out there’ in trades not exceeding 1/3 of my total bitcoin position. Like this the majority of my coins go up when the market is bullish. What I didn’t like so much was selling at 650, and quickly buying back at 640, just to grab a fraction of a coin at a rather costly trading fee. So I learned to be patient, sometimes it takes multiple days before my goal is reached. $25 price difference is my absolute minimum now, however your $40 sounds like a better idea.

      Hope this helps, but again, I’m no expert by any means. 🙂

      1. George

        Yep, trusting exchanges can be rather stressful, I have been with BTC-e since I started trading and I like them because I love Metatrader, I think the bigger chunks is key though. Still need to find my style trading manually as well. Patience is key, but damn sitting around waiting for a good trade can be boring. I will move some coins to my local exchange (quite small daily volumes, but this could work to my advantage). Going to try the manual trades. Wish me luck.

        Love this small community that follows Enky, honest no trolling trading. Enky keep up the good work,

        Arthur I will give your 1/3 method a go and see how that works for me. Thanx mate!

      2. Frank

        @ Arthur & Andrea Chiavazza. Just a warning if you try to backup your wallet by using the dumpprivkey command. This huge mistake is made by many people when they have been using a client like bitcoin-qt for a while, and decide to make a paper wallet using only the primary address from bitcoin-qt.

        In that case, they believe that they are putting the entire bitcoin-qt wallet balance into a paper wallet. In fact, all they are doing is putting the balance for the PRIMARY bitcoin-qt address into the wallet. All the change addresses hidden to the user in bitcoin-qt will NOT go into the paper wallet.

        Then a crash occurs, or whatever. User imports from paper wallet. Wonders why balance is so much less than what they had. It’s because the change addresses weren’t included.

        My advice for backing up: After each transaction backup wallet.dat on a usb-stick and put it in a safe.

    3. B. Mums

      Responding to George’s post, but this question is for all using MT4, because I’ve only ever traded manually (I’ve never traded in my life prior to November/Bitcoin). Where can I find a good site/tutorial that explains most of what I need to know to run MT4? I’ve considered automated trading for some time and I think it may be time to try it out.

      I also agree with George, this small community is awesome – It’s hard to find areas where you can talk trade without the trolls. Enky, thank you very much – you’re a stand-up guy to offer all that you do (AWESOME advice and pro trading tips) for, well…Nothing really. Everybody else in the world is out to make a quick buck with their ‘advice.’

      1. George

        I wish I could direct you to a good site for MT4 and all it’s features, I kind of just downloaded it and jumped right in clicking about and figuring out as I go along. It’s actually quite easy, play around with it for a bit. The experts are quite tricky though when it comes to programming them with code (I have very little programming experience) BUT I visited this site: http://codebase.mql4.com/ and found quite a few experts for download.They are mostly for forex but some of them can be tweaked for Bitcoin when you play around with the settings. I just googled like a mad man and eventually found some useful info to help me get started. The platform also allows you to then use your expert advisor to do some backtesting with your settings (this is the fun part). Wish I could help more but I mostly youtube/googled most of the info. Do shoot with any specific questions if you have any, will help where I can.

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