Long Term Update: again Congestion

As i said recently, a congestion occurs when four consecutive bars open or close within the range of a “measuring bar”. A “measuring bar” becomes such when its price range contains the opens or closes of at least three of four subsequent price bars,  I consider the daily bar of last 27 April the measuring bar with the range from $430 to $460.

We can say that it is a congestion because we have been inside the measuring bar for 18 daily bars, more then 20 bars it is a Trading Range with a breakout usually occurring before the thirtieth bar.

I expect to see a breakout in the next two weeks also because of what i wrote about the length of the correction started in December ’13; I think that this congestion will not last more then 30 days in a volatile market like this. Top of the congestion range is also the one year VWAP now at $460.

chartIf XBT/USD will break below the congestion range, i still think that the $370-$390 price zone will provide some support.

 

Advertisements

66 thoughts on “Long Term Update: again Congestion

  1. Elie

    if we break past 465 I suppose our next stop is the previous high of 505. Do you think we might go much higher (e.g. 540 and 690) or that’s yet to be seen on that break in function of the volume etc..? thanks Enky

    1. Enky

      volume on long term is still bearish but improving, we need big news for a strong break up above 600-700, maybe ebay accepting bitcoin

      1. Elie

        There are some good news this week actually for Virgin CEO and eBay but nothing ground breaking I guess:

        1. Richard Branson (CEO of Virgin) said that Banking As We Know It Is In The Midst Of Enormous Change because Bitcoin will take over in his opinion: http://www.businessinsider.com.au/richard-branson-bitpay-statement-2014-5

        2. Also eBAY John Donahoe told shareholders yesterday at the annual meeting in San Jose that eBay is considering integration Bitcoin with Paypal! (this one is making me very bullish) http://www.coindesk.com/ebay-ceo-actively-considering-bitcoin-integration/

        3. Bitpay gets funding round of $30million: http://www.forbes.com/sites/perianneboring/2014/05/13/bitpay-is-headed-to-the-moon-and-richard-branson-is-on-the-spaceship/

      2. Arthur

        Yeah, my heart jumped when I read about eBay/PayPal. So far it didn’t do much to the bitcoin price though, just like the China news is not doing much anymore. I’m starting to look forward to June, meanwhile not setting up trades and sticking to my coins…

        BTW I stopped with hitbtc, and moved my coins out of there. Meanwhile I asked Bitstamp about their future plans, but their answer was a little disappointing.

        “Dear Arthur,

        Currently we do not intend to introduce any new trading features, however would there be any changes implemented in the future, we will make sure all our customer will be properly informed.

        We would like to thank you for your suggestion [Arthur: for implementing a Stop-Loss Order feature]. We will make sure to include your suggestion at our regular discussions about how to improve the exchange and the user experience.

        If you have any additional suggestions or questions, do not hesitate to contact us again.”

      3. FJ

        Please enlighten me: Why would I choose to pay my eBay purchase bith Bitcoin in lieu of any other currency. PayPal will take its percentage anyway? Bitcoin only has its advatnage when you want to pay directly to another wallet somewhere? No cost and no tracking?

      4. Arthur

        To be honest, I don’t see many advantages on hitbtc currently. Can’t say much about reliability, I stayed there only a few days and decided to move out asap. They have low volumes, it needs a lot of scrolling to move around, their GUI doesn’t look good on a smartphone, and it’s almost impossible to buy/sell everything you want since they only have 2 decimal places in their trading fields. This last one is a killer, in my humble opinion.

        So far, Bitstamp remains the place to be for me. They need an update with extra features though, before they loose their market share.

      5. vanen

        tsss, feels so much like french mentality, “why spend to make things better while we’re number one, we don’t need that, so take it or leave it” lol

      6. Flavius

        Paypal says the largest portion of their fees goes to visa/mc so if they accepted bitcoin, they would play like an escrow and take fee only for that.

  2. Arthur

    Talking about congestion… $3.95 only between daily high and low! Bitcoin starts to look like a big company stock lol.

    1. Elie

      I have a feeling that if we fail to breach the current high (450) and VWAP of 460, we will revisit the low of 425-430. But we will see.

    2. Arthur

      Well, I’m game for another $430, since I threw in some more fiat money last week, waiting for an opportunity to buy a few extra coins now that the market seems to be on a turning point. Those extra coins I want to use for a ‘long position’ in cold storage when the price is stable (bitcoin and stable: contradictio in terminis, I know lol!) on $900+ again. So no trading whatsoever with these coins, just a rather tight stop-loss on $410. Fingers crossed for $430…

      1. Arthur

        Just bought in at 449 anyway. Somehow I feel more safe with the coins in my hand… My guts feeling says a break out going up is more likely. In case I’m wrong I can always do another trade, if I feel the need.

      2. vanen

        mhhh, i was currently thinking about selling actually… i definitely feel it ca’ go both ways… my personnal feeling was that it would go up to 500, then fall back at 380, but i’m not sure anymore so i decided to sit back and watch while thinking. definitely not the best period lol

      3. Elie

        yeh impossible to know the next move. I am sitting down and watching once we break 460 ill buy in with good volume then sell at 500. If we fail to break 460 or even 450 by Monday then I would be sure we heading down to test previous lows. I put buys at 430s. I am watching out for a Chinese ban on exchanges to operate (last nail on bitcoin and it could happen), if that news happens then definitely we will see 370-390s

      4. Arthur

        “I am watching out for a Chinese ban on exchanges to operate (last nail on bitcoin and it could happen)”

        Exactly, I think that’s why we are not moving. Extremely low trading volumes, and a price zone of < $10. We saw this same pattern in January somewhere also in the $800 range. That period lead to the bankruptcy of Mt Gox. In a congestion I better sit on my coins, I decided, also since I'm so 50/50 about this one (with a light tendency to a break out going up because of a steady flow of good news). I'm the first to admit though that China can still give the market a push down. Not sure it will, not sure when, not sure how firm… 50/50. Also, to my humble opinion, we have now slowly moved out of the Bearish Triangle so for me that's not a guideline anymore.

      5. Anathema

        “Also, to my humble opinion, we have now slowly moved out of the Bearish Triangle so for me that’s not a guideline anymore.”

        I don’t remember if it was here, but someone suggested looking at the MACD graph for the Bitstamp 3d chart on bitcoinwisdom. The last four consecutive bars are green, they’ve been red since the first half of December. Hopefully that means we’re on the rise again.

      6. Arthur

        Yeah, that was here, I remember that. Let’s see what’s going to happen in June. So far Enky is spot on with this post about congestion, and I’m even surprised by the low volumes and narrow bandwidth that comes with this congestion!

    1. vanen

      oh my god! i didn’t noticed that it was so bad!! nobody’s playing with bitcoin right now, it’s almost scary

      1. Elie

        im still all in fiat seeing the low volume in the past few days and were still slightly bearish and slowly drifting down on HUOBI.

    2. Arthur

      Yeah, scary is the right word indeed, vanen. Shocking even, I would like to add. Glad I’m currently 100% in coins, because on Bitstamp it didn’t touch the 430’s for several days in a row, and it’s touching the 450’s all the time. There’s a tiny upward trend developing, as far as I can see, but I like to repeat: tiny.

      Good luck on Huobi Elie, are volumes dropping dramatically there also?

      On a sidenote, since I’m enjoying the sun here in NL and catching up on the bitcoin articles, I came across this one. A rather refreshing read… 🙂

      http://themisescircle.org/blog/2014/02/12/im-hoarding-bitcoins-and-no-you-cant-have-any/

      1. vanen

        mmmh.. even both of you can’t seem to make the same decisions… bitcoin, what did you do!!! haha ^^ i’m leaning more toward arthur position, not because i feel it’s better, but because it’s more convenient for me. if i was in fiat, i would stay in fiat and hope for a drop. this is the first time i can’t make my mind about two scenarios… damn bitcoin!

      2. Arthur

        Well, duhhh.., you bought in at 335, so you’re safe as long as this congestion is in the 440-450 range. Maybe somewhere around 420 you can start thinking about a next trade. I’m watching 420 also, since it is now my stoploss level for my longterm coins that I just bought at 449, and my trade level for the rest of the coins. Hope I’m making sense here lol!

        Anyway, let’s see what next week will bring. Mixed signals again, as the Chinese exchange CEO speeching at Amsterdam’s Bitcoin2014 didn’t sound overly worried (but is still considering moving abroad), and meanwhile some 700-800 coins were dropped at Bitstamp in a short while just now, causing the price to drop a few dollar. Normally this wouldn’t interest me at all, however, now it’s 1/3 of daily Bitstamp volume, and it happens on Sunday just before the working week starts. Not sure what to make of it… Probably nothing, I guess.

  3. Amit

    Hi guys

    some how i dont feel good with putting my bitcoins in bitfinex,
    i understand they are based in shangahi and not in hong kong and
    this make me bearish (: , i still didnt get the verfication from bitstamp and itbit and i’m looking for a safe platform,
    did you heared about kraken?

    Thanks,

    Amit

    1. Arthur

      Hey Amit, yes I heard about Kraken, even tested them last year. Don’t remember much though, but with their (still) low volume, I wouldn’t go there if you want to trade with hundreds of coins. In case you have a few coins to trade, just open an account on every top 15 exchange (check the bitcoincharts website) that is trading in the currency of your likings, and see if you like it. Some even offer some play money that you can use to try them out. Never tried Bitfinex though, but I’m not scared of ‘strange’ places.

      After I visited hitbtc a while ago, I’m firmly sticking to Bitstamp. Their overall GUI and 8 decimal fields are pretty cool. However, they bombard you with KYC and AML rules.

  4. Amit

    Thanks Arthur, after loosing bitcoins at mt gox i dont feel safe with any of those exchanges,
    kraken is based in the usa and this make me feel better, they also been funded with $5 mil by vc’s
    so it looks like as safer place, maybe i will use bitfinex just for this week till i get verified in kraken.

    1. Arthur

      Yeah, can imagine. Sad to hear this, Amit. As Enky adviced numerous times: never leave more than like 10% of your coins on an exchange, not even the most trustworthy ones. I’m using several accounts like blockchain and coinbase, just to spread them around. Hopefully soon I will even put a rather large part of my coins in a semi-permanent cold storage.

      BTW Bitstamp was reportedly funded with 10m VC bucks, however, their CEO didn’t want to comment on that.

      http://www.coindesk.com/bitstamp-got-10m-fortress-linked-hedge-fund-last-year-bloomberg/

  5. Arthur

    When I read these interviews, I really don’t see the 300’s happen anytime soon. Not based on Chinese news, I mean.

    http://www.coindesk.com/chinese-exchange-ceos-regulations-future-plans/

    Instead, I foresee a congestion period that will last until the end of the month, like Enky is writing about, and then hopefully in June a (probably very slow) return to the bullish mode. It would really help if a ‘killer app’ sees the day of light in the upcoming months (otherwise where is all that VC money going?), and the bull run might also be a little fueled by the Wall Street people carefully entering the bitcoin market.

    I have been thinking what a killer app should be about, and I’m thinking micropayments in commercial fields where it was too costly to implement with current money transmitting systems. This has been tried recently with a newspaper in Chicago, and I’m curious to see more of these initiatives.

    And another example, satoshis that will be used to protect against email spam. Like we have to put a stamp on a postcard, emailing will not be completely free anymore. This will be almost cost-neutral for most people, who receive as many emails as they send, roughly. Spammers will bleed to death in no time, though. The bandwidth gained can be used for more useful purposes. Not a new idea either, but such a thing will bring bitcoin to the masses instantly.

    And I was thinking about a concept where bitcoin, after reaching a rather substantial price, can be used to back the real estate market. Like, 1% of the price of a house is paid for the bitcoin-part of the real estate. The bitcoin-part contains all info about ownership, rental contracts, energy contracts, tax, legal and other issues, etc. etc. and is changing hands with every sale.

      1. vanen

        i’m tired of btc china news , really. hopefully it’ll be over soon with all of this bs

      2. Arthur

        Would the current number of coins in China make a 300 possible when they are dumped? I highly doubt it. They are not 10% of the market anymore… We’ll see.

        With 464 on the Bitstamp counter currently, I’m still seeing this tiny bullish trend developing. Let’s see if it’s a lasting trend.

      3. Elie

        you should not look at Bitstamp currently when trading because it is following Huobi. You should base your “current” analysis on Huobi’s chart until we break out at least at 465 on Huobi. Difference between Stamp and Huobi is 6-7$. If you look now Huobi is still at 2831 CNY which is $453 so watch this instead. Once we break 465 I will fully buy in 🙂

  6. Gavin warns people to view Bitcoin as an experiment why would wallstreet pump their money into something that is still experimental. Imagine an unknown bug bringing the whole system down.. So yeah lets expect investor to dump millions at a time. Bitcoin is currently only suitable for a small percentage as a high risk investment. Its not qualitative investment that will cause the price to rise but quantitative. Wallstreet may still have some time to go before it enters, Bitcoin has been around for 5 years and surely Wallstreet would have entered by now.. They live and breath money..

    1. Arthur

      Agree Peter, if you meant “lets NOT expect investor to dump millions at a time”, because that’s what I think too… They’re only allowed to put a tiny % of their portfolio in high risk investments anyway. A friend of mine works at one the largest pension funds in the world (ABP), and he deals directly with those Wall Street people. He explained me that people on his level are mildly interested in the concept of bitcoin, but are still far away from considering any investments.

      1. Thanks for the discussion, if this is the case and people with money are not willing to put it into Bitcoin then you can imagine Bitcoin to grow in predictable ways in relation to exponential growth with the added human emotion causing the booms and busts. This is why we see similar patterns develop in thee price of Bitcoin If this trend continues then we are due another boom, people are still emotionally recovering from the last crash and are still jumpy.

      2. Also I imagine that after this boom occurs the volatility will yet again be reduced making it less susceptible to manipulation or emotion. I find it too coincidental that companies have just started to surface now like circle or the big funding Bitpay received… They need bitcoin volatility to calm down as this threatens their business model. I also expect that they must be pretty certain this will reduce otherwise they wouldn’t risk the investment.

      3. Might I also add that the crashes might have been so harsh previously because people understand that this is indeed a high risk investment and profits are more prone to be cashed in.

  7. Well this has been a fun week going sideways. At this point China is a pain that needs to be removed. Severed off like the diseased limb that it is. I hope China finally puts out some news to end it all with a flash crash. Partial fiat and partial BTC right now ready to pick up any discounted coins.

    When we do have some moves up it may be hard to see it at first when we all are still speculating about China. Well I might just be better off going into a hole and not coming out for a year lol.

    1. Arthur

      Meanwhile, I’ll take good care of your bitcoins, OK? Just send them to 139qEEryQtSqbUtiU5w3U26cbT6sfZJt1V . I’ll let you know when they have arrived, and meanwhile sign the papers for a safe and sound return in 1 year. 🙂

      (Mr Branson, please reserve that spot on your space ship for a little longer. I might have found a sponsor, finally!)

    1. Arthur

      Me neither. I noticed a tiny bullish trend for a few days, but this is not what I expected AT ALL.

      37Coins announcing that they are working on a SMS based bitcoin payment system was a pleasure to read, but I’m having hard times believing that is moving the market in this way. Maybe all the recent good news together is being priced in?

      1. Elie

        guys their was a reason i said to watch HUOBI’s chart on bitcoinwisdom, it is because thats where the rally or dump was gonna come from! There was a whale last night that initiated the rally, and this morning the same whale started buying slowly by increments of 50 bitcoins and everyone followed. I bought in after HUOBI broke 465. I think this is not over, we might be heading towards 445 and 595 over the next 48 hours. Keep watch.
        You always have to watch those damn whales! Lol they come with surprised.

      2. Arthur

        Haha, this is funny Elie, I just emailed a few friends that I’m not expecting that 500 will resist long… We’re obviously on the same page about this. 🙂

      3. vanen

        i was betting more that next stop would be around 520/540 actually, but hey, that would be so good ^^ so glad i stayed in coins haha ^^ a few weeks ago, on my first loss, i told myself that when the freak-out mode begins to trigger in my brain because i don’t know what to do, i would just sit back , watch and do nothing. guess it’s the right thing to do! anyway, so now, i’ll keep my eyes on 545+ and 595 ! thanks !

    1. higher rising swaps prices. a break out up to 520 range and beyond coming. MACD, RSI ok for that too. For anyone bearish 520 for selling bitcoins and to buy for the bulls. keep on trading and success to all – me not daytrader.

    1. Arthur

      I don’t think so. The bounce back at exactly $500 (Bitstamp) was short-lived and weak ~$15. In my opinion it’s going $500+ anytime soon. Waiting for Enky’s new posts to see what tech lines for support and resistance he sees, to determine where trades are possible. For the moment I’m glad I went back 100% in coins in the 440’s, and not planning a trade yet.

      1. Paul

        27th July 2013 looks surprisingly similar on 3 day bitstamp charts… I think this is the top for now. Back in fiat 🙂 of course I may be wrong !

      2. Arthur

        How about Oct. 24, 2013 – Nov. 29, 2013, any similarities from that period too, Paul? 😉

      3. B. Mums

        I did the same, bought back in at 440, saw it drop to 425 but decided to hold. I’m glad I did.

      4. Enky

        sorry guys but i’m very busy, when possible i’ll do update, resist.level for now are 502 and 540, support 465.

  8. beautifull break out of the triangle. technicly 650 is the next midterm stop for 3 days or two weeks. first breaking the 520 until fibo line then a beartrap until 500. 480 is just history. not for daytrading.

Comments are closed.