Bubbles: Comparing BTC to Gold, Again.
Updated
Introduction
BTCUSD is being tracked on the BLX chart as it has the longest history and likewise Gold is on the Futures ticker likewise for the history and both are on the weekly time frame. Due to the speed of crypto the cart covers less time overall. The main chart is BLX and the chart below is gold centered on 2008 to 2016.
Key Concepts
Narrative
I have learned a lot since I have been trading and charting over the last 3 years to cobble together a system that makes me money consistently and one that I can manage emotionally. And because we live in an age of bubbles I have persevered over bubble charts I have looked to make money off of the popping. I still get out too early on the uptrend, which is fine so long as I don't go short too soon.
The charts should have a remarkable similarity. The main difference is we could add some trendlines to the down leg of Gold after the hammer and show how it channeled down and wedged and recovered, but that distracts a bit from the big picture.
The big picture
Closing thoughts
The markets are all interconnected through traders and investors. And when they need liquidity they are going to take it from where ever they can. The incoming Second Great Depression is going to lead to selling off whatever assets people can in order to pay their bills and support their families, and save their businesses. This means selling of things that you may think are immune. I still imagine the locust swarm leading to food shortages around the world and people dumping silver and gold for grain.
In the background of all of this is Elliot wave theory, meaning that the uptrend on bitcoin when this is over will be mind boggling. It is also why I think we will stay above 2.0 fib extension on the downtrend. I expect we will see some type of wedge formation and BARR bottom developing over the next couple of years so the price action is currently creating the lead in trend line.
I am just a few years away from never having to work again, God willing. Please see the linked post for some of my most accurate calls, some more recent than others.
BTCUSD is being tracked on the BLX chart as it has the longest history and likewise Gold is on the Futures ticker likewise for the history and both are on the weekly time frame. Due to the speed of crypto the cart covers less time overall. The main chart is BLX and the chart below is gold centered on 2008 to 2016.
Key Concepts
- Fundamental charting over all other indicators
- Support and resistance flipping (either trendlines or horizontal levels)
- After you have your chart patterns, look at volume for confirmation on all patterns.
- After Volume, any other indicator you like.
Narrative
I have learned a lot since I have been trading and charting over the last 3 years to cobble together a system that makes me money consistently and one that I can manage emotionally. And because we live in an age of bubbles I have persevered over bubble charts I have looked to make money off of the popping. I still get out too early on the uptrend, which is fine so long as I don't go short too soon.
The charts should have a remarkable similarity. The main difference is we could add some trendlines to the down leg of Gold after the hammer and show how it channeled down and wedged and recovered, but that distracts a bit from the big picture.
The big picture
- twice on each chart the grey filled ovals show where the price action establish and confirmed a long term black trend line.
- The black outline oval shows where the black trendline is confirmed as resistance
- The blue descending triangle shows price action is setting a lower high.
- The Fib extension shows just how low the price action can go based on Gold. it does not mean 100% that we will almost touch the 2.414 fib extension and the high wick off to the left on Bitcoin suggest we will not go that low, so we will be just about to touch the 2.0 fib extension on bitcoin.
- Finally we have the OBV EMA situation (shown below). The purple arrows show hidden bearish divergence (lower high on price, higher high on the indicator). So we are at resistance at both the triangle and this rising trendline and the volume is divergent. We might be trading at this resistance for a couple of weeks before the downtrend resumes. It is going to take a while for the optimism to fade.
Closing thoughts
The markets are all interconnected through traders and investors. And when they need liquidity they are going to take it from where ever they can. The incoming Second Great Depression is going to lead to selling off whatever assets people can in order to pay their bills and support their families, and save their businesses. This means selling of things that you may think are immune. I still imagine the locust swarm leading to food shortages around the world and people dumping silver and gold for grain.
In the background of all of this is Elliot wave theory, meaning that the uptrend on bitcoin when this is over will be mind boggling. It is also why I think we will stay above 2.0 fib extension on the downtrend. I expect we will see some type of wedge formation and BARR bottom developing over the next couple of years so the price action is currently creating the lead in trend line.
I am just a few years away from never having to work again, God willing. Please see the linked post for some of my most accurate calls, some more recent than others.
Note
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