Long Term Update

I waited a while before publishing a new update after the crash to $165 to see if market would have stabilized over $ 200. Now XBT/USD do seem to have a bullish bias and it has traded up from oversold levels but there is too much risk to go against the short term bearish trend. Despite this risk i decided to open a short-term trade (2 long positions opened at $230 and $170) that i’ll probably close at $270 where i’ve the first decent resistance level.
Before thinking about any bullish longterm safe bets i need to see my long term moving average turning bullish again, at the moment it is at around $300 and firmly bearish.

In the below attached chart I have highlighted the important levels for this year that i’ve spoken about in the previous update,these levels are still valid and i think that any visit below $220 and above $130 represent a long term buying opportunity. It would be a perfect longterm buying signal to see this year my long term moving average turning up with the price still below $220.

chart

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27 thoughts on “Long Term Update

  1. ElieX

    Thanks Enky. That verifies my view that this was a needed bull retrace that is currently happening after the big drop we just encountered to $166. I was actually surprised to see the market resume upward with a fairly overbought 4H RSI and 4H Willy. The orderbooks still look thin imo so I think its just some big players / institutions playing around. I also do not think that it is the coinbase news that had anything to do with this rally or the rumors of ETFs.

    I have not had the time to trade Bitcoin lately due to a busy work season for me at work (been in fiat since $321) but I have been watching and I think that we will resume our descent to as you said $130 – 220 area unfortunately after we hit 260-275 level. if we do stablilize at $220-225 or close I think the big players would want to take it up to 290-316 (but the RSI 4H really needs to be reloaded).

  2. madsurgeon

    Thanks Enky for the update!
    I am a long-term reader of your blog but this is my first comment, so I would like to take the opportunity to first thank you in general for all that I have learned from you.
    Now to the current situation: how do you interpret the huge volume of >120K recently? It has only been topped once about a year ago right after the all-time top. Doesn’t it show renewed interest in Bitcoin?

    1. Enky

      I don’t trust too much volume data because each exchange has different fees that have an high impact on the overall volume. Furthermore finex allows you to trade with leverage thus increasing the overall volume activity.

  3. Arthur

    Thanks Enky. I fully understand, and share, your bearishness. I still lean towards a revisit of the $80-$85 level since we broke $266 and $220 just like that without a serious rebounce so far. This market seems in for an ultradeep retraction after the $1163 top.

    And guys, don’t think it can’t happen. The biggest correction downwards in Bitcoin history was 93%. $1163 -/- 93% = $80… It might take several weeks or even a few months before my $85 order will be filled, but I’m trying anyway. It would bring down my average coin price substancially…

    1. Enky

      Yeah but at the moment it is going to $270 and looking the weekly chart there is room to reach 330-350 in 1-2 months, it might be the next lower top (below the previous one of 470$ done with the paypal news) where to open an interesting short trade. It’s a scenario that could materialize if there is strength above $270.

    2. Arthur

      Yeah, true Enky. We just saw the first test of 300+ (309.90 on Bitstamp) but it failed as it looks now, since we returned to the 250s. Reminds me a lot of the Paypal spike/bull trap you mentioned in the chart. This time they think the Coinbase news of 75M funding and opening a regulated exchange yesterday added to the bullish atmosphere, and though it’s not bad news at all, I don’t see why this news alone should reverse the bearish period in the short term…

      I mean, when this market is bound to test the lowest end of the consolidation, Coinbase is not going to change that, I’m sure.

  4. tjepke

    Long time follower here. Thanks for your insights! Your latest post convinced me to ride along to the mid/upper 200’s, after staying on the side-lines since around august.

  5. Robert

    The 1163 USD peak price was a result of gigantic manipulation and after MTGOX and the China BTC ban we will not see prices like that again.

    1. Enky

      yes and no, but the fundamental price of btc is still $1400 (Bank of America btc study) it will be back there sooner or later.

  6. Roger

    Thank you very much Enky! You wrote “Before thinking about any bullish longterm safe bets i need to see my long term moving average turning bullish again, at the moment it is at around $300 and firmly bearish.” Please, which long term moving average are you talking about?

    1. Enky

      ALMA moving average, i’m using the standard version with standard settings on a 14 days chart (2 weeks for each bar) and a tweaked ALMA on the weekly chart. both are still bearish at the moment.

  7. Who knows Arthur. In the absence of wizardry, we have TA and intuition. So far the price is dying a slow death since topping out at 300ish. The notion of a bull market is nowhere to be found so far. Feels like it needs to test the bottom and stay there for some time before fresh powder accumulates. In the meantime, I’m going to get in every time it tanks hard for the bounce…

  8. Arthur

    Same thoughts here Mike. 130 might come within reach even, I think. 310 is coming down horribly fast, it’s still a bears dominant party. Patiently waiting if my $85 limit order has a change to be filled… 🙂

    1. Arthur,
      85 would be nice but it does feel a bit of a distant possibility. I’m also looking forward to the Winklevoss stock to hit the Nasdaq so I can get the heck out of Bitstamp. The trading cost, fund transfer, tax issues will all be so much better to trade out of my regular trading account in the US. Happy trading.

      Mike

  9. Arthur

    Hi Mike, yup, and hopefully the price will go up also around then. Fingers crossed.

    And of course $85 is a little far fetched. But at 800 we thought that of 450, then we thought that of 300 and 200 too… This market seems in for a deep correction and if it happens, I’m ready. If it doesn’t happen, I’ll bank my money back to my saving account later this year. 🙂

    Keep cool Mike, talk soon.

  10. Peter

    The sentiment has changed, I remember from the 800s down people were constantly expecting a reversal. Now people are constantly expecting the downward trend to continue. I wonder if now is the time that investors will buy into. I’m still ultra bullish, I have been holding since the 800s and buying all the way down. I made a big purchase at 190, will make more as we go down further, that’s if the trend reversal hasn’t already happened.

  11. A Coinfiend

    Enky,

    You’ve said in the past that during a bull market, the market amplifies the good news and disregards the bad news. I’m looking at the news of MyCoin disappearing with as much as $387MM, which is almost as significant as the value of fiat/BTC that disappeared in the case of Mt.Gox. While MyCoin appeared less like a “bitcoin exchange” and more like a ponzi scheme from the beginning, I thought the market might still react in some way. Instead the market is acting like this news did not exist (compare this to the news of Gox, when the market lost a large percentage of its value). In my opinion, the presence of such scams is somewhat bullish for BTC over-all, because it means BTC is in high enough demand, and has enough name recognition to be taken seriously by potential investors. Are these bullish signs for the market? Do you think XBTUSD will begin to level off into a sideways range in preparation for a new bull run?

    1. Enky

      I don’t see a high demand for btcs or if it is high it’s not enough to sustain btc over 250$-300$, long term chart is still bearish so i don’t expect higher prices ahead.
      We might already be in the level off phase, i don’t expect to see btc in the double digit this year; 130$ remains my floor for the year.

  12. Christian A

    There’s very little in the way of volatility going on right now :/ when do we expect things to get interesting again?

    1. George

      Who is Coinbase? Some btc bank – do we need middlemen?
      Exchange licensed in what country? As far as I know not even in the whole US (why not in NY and California???).
      What volume? There is no fees, meaning they can be only compared to Chinese fakers. If we compare them to Chinexe exch we see that they are miserable. In China buying of btc goes through some kind of Alibaba coupons, personal accounts of exch employees etc but still are able to at least show higher volume although it means nothing (btw, has anybody you know tried to dump real 5k btc on china exchanges?)
      Has anybody checked how the funding of those coinbases was made and agreed? I doubt they hold all those millions and use them for making good service.
      Conclusion: I believe cb has no effect on the btc price atm. Waiting for Gemini if they are able to get NY license. As Enky stated – there will be no capital on unregulated markets.

      Might be wrong of course.

  13. A Coinfiend

    Enky,

    What about the medium-term prospects of BTC as a flight to safety versus fiat currencies? It was recently predicted by a large US investment house, that a Greek exit from the Eurozone could send EURUSD down to 0.9. While I understand that “grexit” rumors are not having a positive impact on prices now, an actual grexit could set off a domino effect of rumors and volatility spikes. Do you not expect these events to spark another bull run of speculation in BTC? Or do you find these events bearish for BTC?

    1. Enky

      I consider btc very small and unlikely to be affected by those large markets like forex and in my opinion Greek will not exit the EU. If an economic or banking bad event is widely anticipated to occur for some specific reason, it probably won’t. Panics in general are always a surprise and it’s not the case here. Same logic for btc

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