Long Term Update: 3 days chart @bitstamp

chartNot much happened since my last update ten days ago, the market volatility dropped a bit and XBT/USD is struggling to stay above 600 dollars. It is a characteristic of this market because it is composed by amateur investors they don’t have the patience to hold and after a while if nothing  happens they start to sell for eventually rebuying later. Aniway I summarize the situation as follows:

Bullish aspects:

  • Price above long term VWAP (now at $440)
  • Slope of ALMA moving average slightly positive

Bearish aspects:

  • Weak buying volume activity
  • Ratio between buyers and sellers is negative, and it has been so since December $1200 top
  • Market reactions to good news has been sluggish since january $1000 top on zynga and facebook news, this is not bullish, investors are reluctant to buy on good news.

Conclusion
I think that this market will need time to absorb the “huge confidence hit” because of MtGox fiasco but as long as it stays above the one year VWAP ($440) i’m not worried for a possible bear market coming. For who has been ruined by MtGox and its phenomenal CEO and wants to enter again in this market there are two possible strategies:

  1. buy now 100% of your position
  2. buy now 50% and the remaining 50% if bitcoin retest again my long term vwap around $450

Stoploss for both strategies could be a weak market going under $350-$400 for a prolonged period of time and a dropping network difficulty (currently on a strong rise).

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23 thoughts on “Long Term Update: 3 days chart @bitstamp

  1. Gizmoh

    your analysis is bearish overall , investors having “huge confidence hit” and and yet you propose to those Mtgox Victims who wants to re-enter to positioning 50% to 100% . That’s a bad advice IMO.

    1. Arthur

      “your analysis is bearish overall”.

      That’s not what I read… I read mixed feelings with multiple bullish signals and multiple bearish signals. They are highlighted just above the Conclusion section. Reading it like this, the advice makes a lot of sense.

  2. dennis

    Im not sure if you listen to the cesspool which is the bitcoin subreddit. But you are dead on about the impatience. they are all asking “when is it going to go up?” “what will cause it to go up?” they sound like a bunch of babies whining “I bought some bitcoin… why am i not making millions of dollars a day? I’m going to sell”. just tells me that there are a lot of people who bought in because of greed and don’t really understand bitcoin. This good news we have been having is pretty great really. Do you think these greedy investors are going to be a problem for bitcoin? or will its technological merits outshine its price at some point?

  3. Arthur

    Thanks Enky, good analysis again. It’s funny how these price sentiments work, based on sensational headlines that feed the unfunded fear. Because in the background Coinbase is currently registering 5 new users per minute, Bitfinex has entered the top 5 of exchanges with tremendous volumes, VC investments in the bitcoin infrastructure have never been higher, and merchants are adding the bitcoin payment option by the thousands per week. The failure of Mt. Gox might slow that process down a little, but it won’t stop the Bitcoin Express I’m sure. Maybe we have to wait till April/May for the next jumps up though… Meanwhile I’m holding my Bitcoin position, unless something spectacular like Mt. Gox happens again.

    1. James

      Speculators also probably jumping out of BTC and into LTC to ride the wave now huobi will soon commence trading LTC

    1. Arthur

      Obviously not lol! Although I stated earlier that I was holding everything, I tried a little trade anyway after reconsidering what is currently happening. I’m now close to earning 0.5 something bitcoin, after which I can finally show my 0.1 appreciation to Enky. 🙂

      1. Donald

        I’m a bit confused, 2 weeks ago all the signs shown bullish behaviour and no the trend was changed and we are currently in a bearish mode that go down to 450?

  4. Donald

    Hi Enky, do you think it can drop more? i’m having a hard time deciding if to sell my bitcoins and to buy them later
    or to wait for things get bullish again.

    Thanks!

    1. Weioo

      I dont think Enky can really answer that right now. We’re all waiting on the next piece of good, big news. GREAT news = big spike up. No huge news or bad news = continued trickling down until the ratio of good news to low price is good enough for people to panic-buy…Just my 2 cents.

      I haven’t sold yet but I’m beginning to think the odds of the price hitting 550 before spiking up above $600 seems much greater at this point…But there’s always a risk that piece of big good news will come out the moment you sell!

      I’ll let you know if I sell, because the price will definitely spike up shortly after. 😛

      1. Arthur

        My bets are on $550 too. If it hits that low, the extra 0.5BTC is in (because I sold 5BTC at $610). I just got a shock a few hours ago that it had hit $570 something already!

      2. Enky

        Exactly. It’s best to keep a foot in, as i said a winning strategy is to buy 50% now and eventually 50% at around 1year vwap (442$ now) or buy 100% now if you can tolerate an higher drawdown.

      3. Weioo

        I waited a bit longer to sell (@ 587ish yesterday…and what happened!? Drops to 575 then back to 605, lol. But I’m patient and this morning it dropped to 561 on BTCE…My buy-in was 557 (ugh I HATE that) and now we’re back up above 580. It looks to be recovering but I’m looking to make a gain here, not break even.

        I guess I’ll keep faith that it’ll come back down. Enky, how sure are you it will drop to sub-550? Or how about sub-500? It sounds to me like you’re about 50/50 if it will drop below like 500 based on your advice in this thread.

      4. Enky

        yes, but i’m getting a bit more bearish looking what it is doing today. if 540$ get broken a test to 440 is likely to happen.

      5. Arthur

        Yeah, my guts feelings also says we might go down further. I changed my 5.5BTC at $550 to 6.7BTC at $450. Just in time before it dropped to $541…

    2. Mike

      The chart is continuing to show no other direction than down. Long dry spell may be what we are looking at. 500 psychological support looks to be in need of testing, then 450. Hedge funds will wait it out until we have solid support, which i am afraid may take the whole year to establish… of course we are all conjecturing…

      1. Mike

        Even the dips are barely giving a dead cat bounce… the chorus is building in the media, rightly so, that bitcoin as a product is in need of a better pr campaign… from what i can see these things are in the works… clearer regulations, better exchanges, easier usage for the masses, etc. Initial honeymoon period is giving way to “show me the beef.”

  5. Marc

    This is the quietest I’ve seen the bitcoin ecosystem in the past year. So weird. I assume that’s why we’re in a lul? Also find it shocking that Gox can cut and run with hundreds of millions of customers money and nobody is dead or in prison. Just a couple of protesters in Japan being served coffee…

  6. Donald

    what do you think guys, due to the latest decrease, Is this scenario is possible? “Stoploss for both strategies could be a weak market going under $350-$400 for a prolonged period of time and a dropping network difficulty (currently on a strong rise)”

    1. Enky

      the only bear market that happened in 2011 it was accompanied by a dropping network difficulty and speed.
      if there is interest in bitcoin, mining speed should stay strong.

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