Long Term Update: next stop $300

chartXBT/USD is making further downside progress below the 1-year VWAP and at this point i think that the breakout is confirmed, a move should follow towards the old April 2013 Top at $266.
I think that at $300 there will be a strong support because of the first negative deviation line of the VWAP and to reach this level, looking the bitstamp order book, we need approximately 15k bitcoins.
Adding this value to the current weekly net volume we have -25k bitcoins, a value that looking the past should provide support to the price action, a rebounce should follow from $300.

To conclude, now we are at the baseline of the giant descending triangle and it looks ominous.  It can break either way but usually downwards (70%-80% of the time) as i said in my previous update.

 

 

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53 thoughts on “Long Term Update: next stop $300

  1. dude

    But right now market seems oversold so do you think we will see bounce before we go further down?

    1. Elie

      No bounce at 300 IMO since this mega drop this morning was due to the fact that 2 Chinese banks warned HUoBI and Btcchina that they need to close their account on April 15 otherwise they will freeze their assets. So the rumours were true and Enkies update this morning is as usual excellent on reflecting the downtrend too 300! I still think 266 will come briefly but we will see 🙂 glade I stayed the past 3 weeks in fiat fully

      1. Arthur

        Just woke up to see it bounced from 339 to 410. Good guess again, Enky. 🙂

        Should have left my 350 buy trade alone to have the opportunity to sell at 400 again, but well… C’est la vie. At least the expected firework is finally happening.

      2. Arthur

        Hi Elie, still feeling secure about this strategy? Since the price didn’t break through vwap so far, which leaves the downward slope of the triangle in place, I’m starting to lean towards a new low in the high 200’s too… 275?

      3. vanen

        i take back what i said, bought back at 415 $ so made a little profit. i don’t think it’ll go down further too, but i’m pretty sure that right before april 15 there’l be a drop before getting high again

      4. Arthur

        Hi vanen, as you might have read elsewhere, I did the same. Sorry we missed the 300 range trade (so far), buddy. 😉

      1. Elie

        Hey Arthur, yesterday the PBOC (People Bank of China) made a major announcement yesterday on April 11 and said they are NOT and cannot ban bitcoin since they have no jurisdiction over it as a bank. See reference news article from yesterday http://www.coindesk.com/chinas-central-bank-governor-pboc-wont-ban-bitcoin/. Indeed at least they were CLEAR about it but they are still taking major steps to stop banks from dealing or making business with crypto currency exchanges and hence still closing bank accounts by April 15.

        this was a major relief for Chinese traders as they can keep their investment in the exchanges such as BTCCHINA and HUOBI without the fear of losing or getting it frozen by April 15. that’s why their was a noticeable bounce from 340 up to 444 on huobi yesterday! However Chinese buyers did not follow the rally past the VWAP of 440 and as per enkys earlier post we did not significantly break past the VWAP by hitting 450+ with a bigger volume to say that we have flipped to a bull market.

        personal opinion: wait 2 more days till April 14 (it will be April 15 in China) and see the reaction of the traders in China. If we get positive workarounds/news from the Chinese exchanges around the bank freeze then ull see a huge rally towards 550 and maybe more (hard to say). as of yesterday I bought fully in at 380 which is a little risky but I do not think we will be seeing much lower than 400 unless no announcements/workarounds are made by the exchanges and it drags for a while. I suggest you get in at 50% and remain at fiat with the remainder half. I think it’s dangerous right now to stay fully fiat after the PBOC news and as any positive announcement from the exchanges can make us rally and I don’t want to miss it (got a family and kids). But again that’s my opinion and I might have taken a huge risk by buying fully in maybe we won’t see exchanges having workarounds until few weeks from now. Will post once I see other announcements. Note I am not a professional trader, u are free to follow any reasoning u see is rational. Enkys is the best 🙂 good trading to you all.

      2. Arthur

        Thanks Elie, for your detailed thoughts. And they make tons of sense. I wasn’t 100% in fiat like you, however 2/3 in fiat is rather huge for me anyway. Both my trades (sold at 501 and at 432) are still profitable, and providing me 2.1 extra coins. So I just went back fully in coins. When the price is going below 400 again I can still set up a new trade, and when the price breaks EMA/vwap soon, I don’t have to worry about the cash left behind. Safety measurements… Thanks again Elie, good luck to you also. 🙂

  2. A Coinfiend

    Enky,

    For weeks now, I’ve thought to myself that this is an issue localized to China, and that eventually the Chinese bears will run out of gas. Setting the chart aside, can you describe the reasons why I’m wrong in terms of fundamentals?

    1. china is just an excuse to sell, when the market ignore good news and react only on negative news it means one thing: it is overpriced. It went below my vwap long term support and also 200 days moving average, we can’t ignore this.

  3. Andrea Chiavazza

    You are betting on a bottom below $400. This is interesting, because S3052 has been betting on $400 to be the bottom for quite a while now, and he’s still sticking with it. On the other hand you are usually quite good at guessing bottoms. Well I guess we’ll have to wait and see who will be right.

      1. Elie

        good job Enky. I still stick to your analysis and yes its an oversold Bitcoin market right now as you said. 266-300 will be the right spot hopefully, I am waiting down there to buy. Put orders at 290 to make sure i get in properly. (hope it wont go lower than that). good luck everyone

  4. connorcarpenter

    Hi Enky, I’ve been following your analysis and have found it to be fairly spot on, but haven’t acted on any of it (I’m fairly new to investing and was planning to buy & hold) I sold my coins at a modest loss at $395, and put a buy order in at $305. Here’s hoping it will go well!

    1. i do not recommend to sell at loss,i consider a good strategy to average down buying more bitcoins at a cheaper price. averaging down is not necessarily a bad strategy sometimes it is the right one to use, especially in a long term bullish market like this one.

      1. Arthur

        Yeah, I guess it depends on what is your goal with trading. If you want to make cash dollars with the same amount of bitcoins, it’s enough to sell let’s say 10 coins at 395 and buy back 10 coins at 305. Then withdraw the cash dollars for other purposes.

        However, I’m in this trading thing to grab some extra coins with the same amount of cash dollars I originally bought my first coins with in 2013. So I’m selling 10 coins at 395, buying back 12.9 coins at 305, so to say. Those 10 coins might have been part of a previous buy back trade I did at 440. So it looks like a loss somehow, however this strategy works well as long as the price is in a downtrend. When the price is returning to the uptrend, I’m hoping to have (almost) no dollar cash, and as many coins as possible enjoying the uptrend… I’m in bitcoin for really long-term, think 5-10 years at least. During this period I can, and have, use the extra bitcoins for payments, cold storage savings, re-investments, whatever.

  5. Arthur

    Based on this analysis I changed my 2 limit orders on 335 and 350 to 1 limit order on 305. The cash came from 10 coins sold at 501 and 14 coins sold at 432, so I might make +12.2 coins at that level. I would go through the roof when that happens, since it would be my best trade ever… Of course I’m keeping all options open for an even lower price level. I think, however, bitcoin doesn’t deserve that. I’m not in charge though lol!

    1. FJ

      Based on the same analysis I chose the well tested Black Adder approach- get drunk, put on a silly hat and trust your luck. Good luck, everyone, a bird in the hand is bett er than a dozen up your =/&%% 🙂

    2. you shouldn’t move orders, once a strategy is decided and put in place, stay stick with it!
      regardless of what i say. if your stoploss get hit you can give it a try at a lower price, eventually.

      1. Arthur

        Yeah, learned a lesson here Enky… However, it looked like you recalled the 330-350 support zone mentioned earlier (as you stated “I think that at $300 there will be a strong support”), so I thought the 330-350 support zone was gone for some reason. But it wasn’t, obviously. And the silly thing is, I figured out already that around 350 there should indeed be a strong support zone, since people tend to think in steps of $50 around these prices. And a coin for $350 is a bargain for many, many people… So yeah, lesson learned.

        Since we have seen most Chinese exchanges (including the big ones) admitting they are somewhat troubled by their local banks, which caused the spikes down lately, and given the fact that we had a really proper bounce back from 339 to 410 today, do you think the bottom might have been reached with 339? Just curious… Thanks, Enky!

      2. it could be, this market is very oversold, it is falling without a breath since 710$ top dated 3 march ’14.
        I wrote in a previous update that resistances could be at 550-580, at $550 there is the 2 months vwap

  6. Najska

    To exploit market bubbles, it seems that since LTC/USD generally has a higher price range in any given time interval, LTC gives better options for small and medium sized investments. Can I ask why you exclusively analyse XBT? I’m trying to implement your analyses to LTC market and it seems to yield higher profit.

  7. Elie

    so far guys it doesnt look good, i moved all my buys from 330 down to 260. I don’t foresee a strong bounce so far… unless this changes only time will tell.

  8. A Coinfiend

    Enky,

    I am left with one lingering question. You said you still believe XBTUSD goes to $3000 to $3500 this year. Can you describe the circumstances it would take to make that happen? Surely it would take a boost in news, like a major retailer accepting BTC?

    1. I don’t like to believe, that target has been derived with a forecast, as i’ve said in january:
      “The maximum yearly upside target for 2014 should be around the $3000-$3500 price zone, in accordance with my previous long term forecast of $3600”
      Circumstances? they aren’t important, but probably something bigger yes.

  9. Jose

    After we have bottomed out and are on the uptrend again, where do you think the price is headed towards?

    1. Arthur

      Ouch. On Bitstamp it went down to 339.79, and I happened to have changed my order from 350 to 305 just before that. So I’m with you lol. On the other hand, it’s coming down again already (halfway the 380’s as we speak).

      1. MS

        Hehe, I made the exact same “mistake” and removed a buy order at 350 in favour of a new one at 302. I really hope it goes down again, at least temporarily. The rebounce still seems to have a bit of momentum. Back up to 404 on Bitstamp.

      2. BK

        he he, i moved my buy order from 362 to 332. there was resistance around 350 on the 9.11.2013, so maybe that explains why this area acted as support on this occasion. so the conslusion for me is that next time, place the order exclusively near the resistance/support zones, and change anything *only* in case of stop loss.

  10. steffen

    Well, a pitty it already rebounced at 340, not 300 as forseen…shame on you Enky 😉 Unfortunately I also couldn’t make the trade (asleep in Germany and limit order was set on 300 LTC equivalent).

    However, I think this is not the uptrend yet, this was not the bottom, this was just an intermediate rebounce. In my opinion, the 266 is still hot!

    Btw guys, have a look at LTC. It acts the same, just with leverage as the ratio falls and raises together with the price. Want to make some serious coins? Buy LTC at the bottom (was 0.022) and exchange to BTC at its high (at least 0.05)!

    1. Arthur

      “However, I think this is not the uptrend yet, this was not the bottom, this was just an intermediate rebounce. In my opinion, the 266 is still hot!”

      Agree with that. It’s coming down again as we speak.

  11. dude

    One year VWAP should stand as strong resistance at approx 435-440? But maybe we have seen this bounce already and are still heading to the final capitulation, volume seems a bit low still that this would have been it.

    1. steffen

      Maybe you are right, looks like it’s either up to 550 with intermediate resistance at 440 or down to 350 again and below, lowest 266. What will it be, you got a time machine? 🙂

      Currently, it’s fighting with the one year EMA at approx. 425. Volume is a little down, that’s true, but the green spikes before had good volume.

      In don’t know…

      @Enky, what percentage would you allocate to up/down?

  12. connorcarpenter

    Hey Enky, are we still below the VWAP and your analysis is still valid despite the bounce? Thanks!

      1. i’m waiting a positive volume ratio (buy/sell) on the 3 days chart, i’m not going to post on my blog risky trades, i’ll wait a well established uptrend before opening a trade

  13. dude

    Now is good time to short if you set your stop-loss to 440-450. If 440 breaks with volume, wait for next fallback and buy your short back with loss. Otherwise wait for your 270-300 bids to get filled. Check support at 340 (recent low).

    Don’t go full fiat. Calculate your loss beforehand if you have to obey the stop-loss.

    Cool trading!

  14. Andrea Chiavazza

    It looks like this recent bounce has scared the bears a bit.
    But you have to be careful: the bears are easily startled, but they will soon be back, and in greater numbers.

  15. Arthur

    For what it’s worth, some info from a repost on CoinDesk of an article by Tuur Demeester. He also states he is only trading with 2-3% of his bitcoin holdings, which I find uhmm… Interesting. I guess that means he is rather bullish and in it long-term I guess. Anyway:

    “A retest of the $260 April high would form a strong bottom for a new rally to be built on –  a drop below $350 will likely lead us there – but based on the data above (and the strong signs that Wall Street is getting ready to move in), I suspect that if it happens, such a drop would be short lived. I’m still not convinced prices will dwindle significantly lower than the $380 levels.

    With likely troubles ahead for the Western stock markets, and with that also the legacy banks and governments, I expect wind in the sails for hard money by summer or fall.”

    1. Elie

      yes, were still temporarily in a small congestion and that until after April 15 deadline.

      I would be surprised if we went below the technical old/previous low of $380 especially after the PBOC statements few days ago that was fairly clear on bitcoin not being banned – but rather they wanna make Bitcoin difficult to get hold off. We should keep doing sideways bounce btw 380 and 440 until April 15 then afterwards if volume permits we can start our run up past the 440 VWAP(unless more bad news come along).

      Seems that today HUOBI was not able to break below the 400s after several hours of trying, seems traders do not see the point of going further down.

      1. Andre

        The rate sky rocketed today already early in the morning (Europe time 🙂 ) …. from a modest 410 to 430 in less than 30 mins. What happened ?? Are we on the way to break through the VWAP and return to rates before March ??

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