Replying to a comment which was made on another blog:
Any thoughts on current BTCUSD move?
FYI : Craig W is starting to threaten with a segwit attack again
https://twitter.com/ProfFaustus/status/1063013199849631744/photo/1
- ProfFaustus
Several people have made me aware of the Craig Wright threat and I will try to make time to catch up on this news by tomorrow.
The breakdown of BTC after it was grinding higher lows above $6K is somewhat disconcerting, but not entirely unexpected.
Recently I wrote there was still a 20% chance of breaking down to $3000. Also there has always been great chance of dipping in a false move before moving much higher which was the exact pattern in mid-2013. Right before renewing the mooning to $1100, BTC first dipped in a false move down in the middle of 2013 at the end of the 2013 correction:
So we can either breakdown here to $3000 such as if Craig Wright isn’t bluffing, or this can be a false move down for one last shaking of the tree of weak hands before we move to new ATHs in 2019.
If we do break down to $3000, this will change the outlook such that we will not likely make new ATHs in 2019. I would then need to revisit the chart analysis of this blog. That would significantly alter our planning as well.
EDIT: the following logarithmic chart indicates strong support above $4700. A bottom of $5000 seems plausible. This would indeed mimic the dip at the end of the summer correction in 2013 before reaching new ATHs by the end of 2013. Otherwise if we close any month below that strong support, then likely to crash to $3000.
EDIT#2: a quick waterfall of the price has transpired down to that strong support line. This looks like it may be a bottom because of the surge in volume. Shaking the trees so all the scared people will jump off before we start moving up. A very quick surge with high volume is what we normally see at a bottom. A bottom here would perfectly mimic what transpired in 2013 where Bitcoin’s mid-year correction lead to new ATHs several months later after a final “scare you” dip at the end of the summer correction (which I was expecting).
Someone else charts the strong support on the non-logarithmic chart at just below $4000:
Note I still haven’t had time to study Craig Wright’s threat, but my gut instinct is to ignore him. I will soon comment in more detail on his threat.
I had predicted this decline months ago:
“Banned dude projects Bitcoin bounce maybe to $10k, then renewed decline to $4600”
Apparently the entire selloff is being lead by nonsense news:
https://www.ccn.com/bitcoin-price-hits-a-new-yearly-low-at-5170-is-4000-inevitable/
https://www.coindesk.com/crypto-exchange-kraken-warns-traders-over-bitcoin-cash-sv-red-flags
The IMF telling nations to create their own cryptocurrencies is the sign of desperation for the nation-states and the IMF, not a threat whatsoever to Bitcoin’s rise as the future global reserve currency. Click that link to read why.
P.S. Trololo has FMV at $180 billion mcap for all coins and today it reached $170B:
This flash crash bottom seems to be occurring on Armstrong’s Nov. 21st Pi target ECM turn date, thus seemingly confirming that Bitcoin is aligned with the globalization trend underway and the death of the dollar reserve currency (the short vortex, strong dollar). Remember also BTC was the only asset other than USD and U.S. stock markets that broke out above downtrend on the prior July 12 turn date:
https://www.armstrongeconomics.com/future-forecasts/ecm/november-21st-2018-pi-target/
https://www.armstrongeconomics.com/uncategorized/the-sovereign-debt-crisis-on-schedule/
As Bitcoin bottoms on the week of the Pi date, the EU starts sanctions on Italy which may be the catalyst to blow up the sovereign debt crisis in Europe:
So simultaneously on the Pi date there’s the turning negatively of the extant Titanic financial system, including the demise of the extant corrupt Western finance juggernaut Goldman Sachs, and the bottoming of the fledgling future monetary system.
The globalization issue of the Russian elections meddling is coming to a crescendo this week:
https://bitcointalk.org/index.php?topic=4675898.msg43123568#msg43123568
Real developments are (eventually) very bullish for Bitcoin:
https://www.ccn.com/susquehanna-exec-bakkt-and-fidelity-could-solve-bitcoins-liquidity-issue/
https://www.ccn.com/breaking-worlds-biggest-stock-exchange-operator-is-launching-a-bitcoin-market/
https://www.ccn.com/how-the-efforts-of-bakkt-could-lead-to-the-approval-of-the-first-bitcoin-etf/
https://www.ccn.com/nyse-owners-bitcoin-futures-market-will-open-in-mid-december/
https://www.ccn.com/lawyer-dont-overestimate-bakkts-impact-on-the-crypto-market/
https://www.ccn.com/bakkt-to-lead-bitcoin-recovery-feb-2019-etf-denial-crashes-btc-analyst/
EDIT#3: However Bakkt has delayed their launch.
Posted a comment on the blog of the CEO of Bakkt, the upcoming futures exchange for Bitcoin that could enable the approval of an ETF and bring in institutional liquidity:
https://medium.com/@shelby_78386/kelly-kudos-for-blogging-direct-from-the-ceo-b9d50ef76e48
EDIT#4: It’s likely we’ve bottomed at $3460 (Kraken) on Nov. 25 at 17.6% of the ATH, 3 weeks shy of one year since the ATH of $19,660 (Kraken) on Dec. 16. Prior bottom in 2015 was 14% of the prior ATH. Further decline to $3000 would be 15%.
Again this nearly 1 year correction with this final panic selloff appears to precisely mimic the pattern of April to July 2013. So if we multiply the duration of events from the bottom July 2013 to the ATH in Dec. 2013 by four to get the conjectured, projected timing for events going forward then earliest possible rebound for Bitcoin that I expect is:
- 1 month to climb back to ~$5000, then a slight dip
- 4 months to ~$6000
- 8 months (summer 2019) to ~$8000
- 12 months (end of 2019) for next parabolic move to launch from below $10,000
- ~16 months (Q2 2020) to exceed $19,660
- 20 months (end of summer 2020) for next ATH likely between $50,000 and $100,000.
Whereas, if the current bottom is mimicking the Jan 2015 bottom, then conjectured, projected timings:
- 2 months to climb above $5000
- significant declines to $4000 until a firm bottom within 7 months
- 9 months to ~$6000
- 10 months to ~$8000
- 14 months to ~$11,000
- 20 months (end of summer 2020) to exceed $19,660
- 30 months (summer 2021) for next ATH likely to exceed $100,000.
Also read this.
EDIT#5: someone sent me the following chart with the comment that $3100 is the 200 DMA and if BTC falls through $2400 we are doomed.
So BTC came down to the bottom of the long-term support channel on that chart.
I tend to think we are going lower. Just a feeling really but the overall mood is grim not greedy.
I think we will bottom when BITMAIN declares bankruptcy but that may be
wishful thinking on my part. Maybe not though.https://bitcoinexchangeguide.com/bitmains-bitcoin-holdings-btc-bch-are-in-the-spotlight-as-pre-ipo-investors-dig-into-latest-numbers/
https://bitsonline.com/bitmain-sells-btc-bch-ipo/
https://bitcointalk.org/index.php?topic=5074555.msg48171488#msg48171488
Good work to dig up those links. I’ve been too busy to closely track developments and shenanigans in the crypto ecosystem. A trader really needs to pay attention to all of these developments, so they would have seen the crash coming. I don’t have time to be both a trader and software developer. So I can only HODL or at most trade the major tops.
Note the potential bankruptcy of Bitmain and their going all-in on BCH selling off their BTC is a prime example of what I was explaining to Craig Wright about everyone who forks off of the Real Bitcoin is going to end up bankrupt (including Core):
The losses due to mining BCH and BSV are small compared to the value of BTC that has been sold on this decline.
At this point the only people who are selling BTC are presumably those who either are irrationally paniced or are forced to sell because of their liquidity problem. For now my presumption it is irrational to think Bitcoin is dying or that the cryptowinter would be permanent. So those who believe Bitcoin is here to stay in the world, would not sell now.
Per your last link above, those selling may include miners who have gone bankrupt and need to pay off their bills. But another fact from your links is that Bitmain doesn’t have more than ~20,000 BTC to sell, and that was a single day’s volume on only one exchange during this decline. So Bitmain’s potential bankruptcy doesn’t seem to factor much into whether Bitcoin will continue to decline more.
Rather it could be liquidation of Bitcoin hedge funds, other miners, etc.. After they have been liquidated, then no one else will sell.
Also the hash rate war may be ending soon, so the BSV group wouldn’t need to sell BTC or at least not as much. Thus it is likely they were bluffing (about a long range hash war) to short the market and expose Jihan’s weaknesses.
So deleveraging wasn’t complete and thus the reason for this recent crash. As bankrupt miners stop mining, the Bitcoin hashrate declines. And then as you know an equilibrium is established for those who are sustainable. If some miners are operating on debt and willing to sustain their mining at a loss for some reason, then the equilibrium process could be delayed. Ditto some hedge funds and what not that may be trying to hold from selling to stave off bankruptcy (i.e. if they don’t need to mark-to-market their accounting until they sell).
The NYSE and Bakkt are preparing to offer in January physically settled futures for institutional investors.
The whales are shaking the trees so that fools panic and give their BTC to the whales, before we begin this next bull phase.
$3000 would put the decline in Bitcoin at the same -85% as 2015. But the prior declines were more volatile at -99% and -94%. So why would this one be more volatile than the last one as Bitcoin has now a larger market cap and is more mature market. Volatility is decreasing over time as a market matures and becomes more liquid.
The pattern in 2015 was the last crash to the bottom in January, then over the next months more drops to almost retest that bottom as the deleveraging process played out. The reason for the long time before price rises again is all the lingering deleveraging diffused over many months (e.g. an ICO project that needs to sell more BTC to pay salaries), but the last flash crash tends to be most dramatic, concentrated deleveraging and provides the bottom price.
For us to not have bottomed yet, then that means there must be some significant deleveraging that is delayed for some reason. But I can’t see how Bitmain’s ongoing deleveraging is tied to the Bitcoin price other than if a hash war continues and Craig has to continue selling (but again that appears to be a fraction of recent volume) or if Bitmain would continue mining at a loss on Bitcoin for some reason while eating up their formerly $1 billion pre-IPO liquidity. I suppose you could argue that those who want to bankrupt Jihan might want to drive the price lower so that he can’t continue to mine on Bitcoin profitably. But there’s a natural equilibrium point that can’t normally be driven by the desires of a counter party.
EDIT#6: price is currently $37xx. Looks like there could very well be another leg down within days as an extension of this flash crash. Independently analysing the chart, I can also see the last line of support is between $2400 and $3100. The $2400 level would be a -88% decline from the Kraken ATH peak $19,660. For me it’s unexpected that our cryptowinter would bottom with a deeper decline than the -86% of 2015. But I guess that is what ICO madness (thanks Vitalik), Tether (thanks Bitfinex), fork off airdrops (thanks BCH), and other madness (e.g. Core hijacking Satoshi’s protocol and forking all the fools off onto SegWit) was somehow greater proportional leverage than the Mt. Gox fiasco. There’s too much disassociation from reality in our ecosystem. Who has actually added real value to Satoshi’s invention? Monero added (somewhat dubious) anonymity. Think about what have you actually used cryptocurrency for other than speculating on price appreciation. That will give you an indication of the lack of value that has been added. Satoshi’s invention remains there waiting to serve as an alternative to the dollar as a store of value as our financial system blows up over the coming years. But what else does anyone use cryptocurrency for? And I don’t think people are going to replace their credit cards with crypto for commerce anytime soon. Why should they? People don’t need that. If we want to drive crypto adoption, we need a popular use case that people can’t already do with extant systems.
In short, our ecosystem is still waiting for a real (not hype, not vaporware) killer app other than just Bitcoin as a future reserve currency asset.
RE: Most Important Bitcoin Chart Ever