Hi Guys,
First of all I want to do a quick recap on my previous article “Think like a whale – take profits at the end of October” and after that I want to share you why I’m out of crypto right now. I don’t want to say you have do the same but it is extremely important to understand the risks you are taking in the coming weeks and you have to ask yourself if it's worth it.
Recap “Think like a whale – take profits at the end of october”
In this post I told you all about taking profits when bitcoin reach $6000. I shared an simply technical analyse on that so I can give it a recap now. It is important to recap shit because you can learn the most from that. Reflecting is important.
Let me put the current situation as a layer over my TA.
That line was a wild guess what could happen towards 25 october. I must say it is quite accurate after all, besides the fact I was too early at the beginning. And of course, I really didn’t expect that bitcoin run from 5000 towards nearly 6000$. That one was crazy and had a very bad impact on the altcoins. I didn’t get it why people should do that early but I think it was a kind of chain reaction and a lot of emotional trading right there.
I wrote before this post an extended article about the importance of Market sentiment.
Read it here if you want: https://steemit.com/ripple/@nvdm/market-sentiment-could-make-it-of-break-it-an-quick-recap-on-ripple-and-other-altcoins-from-my-previous-articles
The reason I’m already out
Yesterday – 18 october – China’s 19th party congress started. A lot of people were hoping for news from China about blockchain. We were all hoping for unbanning and were secretly hoping that NEO would become ‘the one’. On the 18th I jumped quickly in NEO because I could make some profits about that speculation. That paid off very well because NEO started rising. To protect my investment I was setting stop losses and moved them slowly upwards to secure my profits I already made on it.
That night, a few hours before the congress, my stop loss went off and that was the moment I was out of everything in Crypto.
The reason I didn’t wait for news was that if you are a while in cryptoland you know most of the times the speculation isn’t true or to a lesser extent. So my strategy was, might it happen that China indeed announced some crazy shit about crypto in general, then I would buy back. I would miss out some quick gains of course but I shouldn’t matter at that point because the prospects would become very very positive at that moment. You now see how it was unpacked and why that was a smart decision. On top of that, the fact that BItcoin already tried to break that $6000 level was another big reason I wanted to be out of crypto before the congress would happen. Because after all, that was my exit point where I wrote earlier about in my article “think like a whale”.
Technical analyse
So yesterday we saw that Bitcoin took a first big sell of 15% because that China news wasn’t coming. You can see now why it was smart to be patient and look at the market from the sidelines because of the big drop in Bitcoin (and also a small drop in NEO) which occured.
I made a different TA on bitcoin this time because this one gives you a better view in why bitcoin will come down in the coming weeks.
At around $5000 Bitcoin founds his first support from the very strong uptrend line. You could take a gamble here and buy back for making some quick money. It retraced in a few hours back to its original level and now we could see another movement up towards 6100$ on 25 october, because people want still some free Bitcoin Gold.
I didn’t make that move because I didn’t expect it would be bounced so strong of that trend line. Also I was in debt for making that short trade because weekend is close and we could see another sell off from big players. But maybe they will also hold till 25 october.
Anyway, too many factors here. It wasn’t worth that. Now we probably see a rise towards $6100 but at this point that means only a 10% profit and again, weekend still has to come. Maybe I take a trade on Saturday or Sunday if there isn’t a new sell off tomorrow but I think it isn’t worth it and I could probably better enjoy my weekend. You have to gamble now: would the big players keep their bitcoin to collect bitcoin gold or doesn’t it matter to them? Probably the first one but it isn’t worth it for now so I’m out and will review it on Saturday.
A bad sign: the rising wedge
This move from yesterday is another signal we are entering a dangerous zone. Because it touched the strong uptrend but if you can see there is a rising wedge forming. So there is still room to keep going to $6100 bitcoin next week but after that we are entering a really really dangerous zone where the rising wedge will break most probably.
In fact we could see an earlier rising wedge from mid july till september where the same happened. Together with the Chinese ban on ICO’s – and later exchanges as well - at that time it broke down and retraced around 2800$. After that everything recovered very nice but this time we see a new rising wedge forming and together with the bitcoin gold hardfork it could break down to at least 4300$.
And then it’s important to give that market sentiment a view. Because a lot of people don’t know about the second Bitcoin hard fork in november. It will be the perfect moment for whales to start fudding around. There is a lot of uncertainty the weeks before this second hard fork and nobody could know what is going to happen. This one is really different than the Bitcoin Gold fork so you can’t compare these two. If panic becomes real, we could see a dip towards the $3000 level. Because you have to keep in mind, there are 3 weeks after the bitcoin gold fork and if there isn’t good news after that, the FUD will dominate and we will be in a downtrend.
Buy back time: mid november
So when to buy back? I don’t know how low it will go. Only with a strong fudding we could see the $3000 level again. Maybe we won’t hit that or maybe we will even go lower. So I don’t give much value on the support levels for bitcoin at this point. Instead, I will keep my eye on the dates. I expect the lowest dip a day or so before the segwit bitcoin hard fork will occur and that is probably the best moment to buy in. Maybe we are getting even lower after that second fork if things don’t go very well, so if you want to be really safe you could wait after everything is fine. But then you could also miss out some really quick gains.
I could not say what exactly I am going to do because at that moment it is very important to watch the market closely. But I think I start to buy my altcoins back the day before the fork because I think everything will goes well and then we could see some quick gains the day after that.
It seems that the market sentiment at this point is to buy back altcoins cheap after the hard fork 25 october. But that could be a very dangerous move because if bitcoin comes in a downtrend then the altcoins will also go down in USD value and I don't think they don't keep rising in btc value the weeks towards the bitcoin segwit fork. So be careful with that one!
Future predictions
If everything is over in november I think the future become very very bright and 2018 will become a crazy year. I really think we could hit that $10.000 bitcoin somewhere in the first months of 2018. I strongly believe blockchain will change our lives in a good way and as a developer I can see some nice real-life applications build on it. At the end the big question will become which coins will survive at the end when mass adoption takes in. Because the same thing like the dotcom bubble will happen at the end and only a few survive and become really big, but that is still far away I think. So no worries for now! We can still grow billions in marketcap. :)