Slower Growth For Cryptos Becomes More Likely
Updated
Here's a necessary update on what's going on with crypto. Recently, I've posted a couple of scenarios. The one I've been leaning towards is the slower growth possibility. The other scenario was that the long term trends are held, but I didn't really see enough buying at recent levels to give me serious confidence. This is why I continued to say that these trends could be broken, despite my long term bullish bias. Here is the original post where I talked about slower growth: 
Today, Bitcoin has broken down from support, which has caused the total cryptocurrency market cap to violate a 4-year long bullish trendline for the very first time.
This is very significant. Short term, yes, this is a very strong sell signal. The only hope for bulls (short term) is if the trendline can be reclaimed by daily close. Even if that doesn't happen and we get further downside, I'm still trying to remain cautiously optimistic that cryptos will actually form a new uptrend. The scary thing is, we actually don't know where that would happen. In the above charts, I show that it could occur anywhere between here and Bitcoin's mid-high 6K range. This is still on the optimistic side. Those boxes are periods of consolidation and growth that are meant to mirror the previous bull market, IF history were to repeat. The numbers are there just for clarity. Regardless of what happens here, I think that if we're to get another crypto bubble it will take much longer to play out. I must emphasize again that this is ENTIRELY speculative. If you surf through the ideas on this platform, it is clear that no one knows what's exactly going to happen, including those who have many more followers than I.
Despite the horrendous price action, I don't really want to give up on analyzing this market, but I may have to cope by bringing more humor into my posts. As you can see with my most recent video, I have no problem doing this ; )
Anyway, what now? We can see that the last bear market did end with a capitulation wick, even slightly below the now broken trendline (light blue)
The TOTAL market cap is also right now sitting on the 50w Moving Average
Interestingly, the last time we tackled this moving average from above, the market experienced a pretty major bounce (circled in green)
If we get a bounce of similar magnitude, we'd actually end up back above the long term uptrend again. If we break below that moving average, we can head straight to the 200w Moving Average. There's really no telling how far this market can fall, considering the long term trend has been lost. The reason why I've outlined that we could bounce sooner rather than later is mostly psychological: Many people think crypto is dead. But we also have many who believe Bitcoin will make a new yearly high before the halving. I think the market is likely to pick a middle ground - one of slower growth, but growth nonetheless. This means we can also find support right now, and start moving up slowly (even without regaining the long term trend). Buyers simply are not confident enough to hold larger positions in crypto right now. What would cause people to buy? The most important things is for people to be confident that the market is NOT dying out, and that a long term uptrend still exists. The problem is, after breaking the trend it'll be difficult to discern a NEW trendline. So, the market is a free-for-all right now. The only real technical bullish setup occurs when bearish channel is broken and/or we get back above the trend. That's it. The bearish setup has already occurred.
Now a brief note about Bitcoin VS. Alts. We got some fairly bearish news for Bitcoin today. Regardless of whether you think the news matters or not, people are talking about it, which means it does matter on some level. For one, the possibility of quantum computing is scaring some people away from crypto, even if it's a decade away from becoming a serious threat. People react emotionally to any sort of news in this market. Secondly, the Lightning Network again has gotten some bad press. Losing 30K+ while trying to make a simple payment is not a good look. This is one of the main reasons why I don't particularly like Bitcoin. So far, the best cryptos for payments I've experienced are XLM and Nano. Nothing else I've used compares. Ethereum seems a bit iffy though, considering it relies more on the tech empires of the world having cash reserves, which becomes less likely if the global economy slows down. In any case, it seems to me that we could have a period for altcoins to shine, considering most have at least some advantages over Bitcoin (although Bitcoin's staying power and security have yet to be challenged). I'm seeing a fair amount of volume for ETH/BTC today. If the daily candle closes green and we get back above the 9D moving average, that would be very bullish for the ratio, considering we had declining volume for a while. That should indicate that ETH/BTC will test a major downtrend resistance (orange line with green X)
Look at this volume on the breakout of the downtrend channel (since Oct. 19th). And look on the volume on the retest. Could just be noise, but interesting nonetheless.
That's pretty much it from me. Looks like I'll have to start getting weirder ; )
As always, my posts are not financial advice. I'm not a professional financial advisor, and my posts/videos should be used for education and entertainment only.
-Victor Cobra
Today, Bitcoin has broken down from support, which has caused the total cryptocurrency market cap to violate a 4-year long bullish trendline for the very first time.
This is very significant. Short term, yes, this is a very strong sell signal. The only hope for bulls (short term) is if the trendline can be reclaimed by daily close. Even if that doesn't happen and we get further downside, I'm still trying to remain cautiously optimistic that cryptos will actually form a new uptrend. The scary thing is, we actually don't know where that would happen. In the above charts, I show that it could occur anywhere between here and Bitcoin's mid-high 6K range. This is still on the optimistic side. Those boxes are periods of consolidation and growth that are meant to mirror the previous bull market, IF history were to repeat. The numbers are there just for clarity. Regardless of what happens here, I think that if we're to get another crypto bubble it will take much longer to play out. I must emphasize again that this is ENTIRELY speculative. If you surf through the ideas on this platform, it is clear that no one knows what's exactly going to happen, including those who have many more followers than I.
Despite the horrendous price action, I don't really want to give up on analyzing this market, but I may have to cope by bringing more humor into my posts. As you can see with my most recent video, I have no problem doing this ; )
Anyway, what now? We can see that the last bear market did end with a capitulation wick, even slightly below the now broken trendline (light blue)
The TOTAL market cap is also right now sitting on the 50w Moving Average
Interestingly, the last time we tackled this moving average from above, the market experienced a pretty major bounce (circled in green)
If we get a bounce of similar magnitude, we'd actually end up back above the long term uptrend again. If we break below that moving average, we can head straight to the 200w Moving Average. There's really no telling how far this market can fall, considering the long term trend has been lost. The reason why I've outlined that we could bounce sooner rather than later is mostly psychological: Many people think crypto is dead. But we also have many who believe Bitcoin will make a new yearly high before the halving. I think the market is likely to pick a middle ground - one of slower growth, but growth nonetheless. This means we can also find support right now, and start moving up slowly (even without regaining the long term trend). Buyers simply are not confident enough to hold larger positions in crypto right now. What would cause people to buy? The most important things is for people to be confident that the market is NOT dying out, and that a long term uptrend still exists. The problem is, after breaking the trend it'll be difficult to discern a NEW trendline. So, the market is a free-for-all right now. The only real technical bullish setup occurs when bearish channel is broken and/or we get back above the trend. That's it. The bearish setup has already occurred.
Now a brief note about Bitcoin VS. Alts. We got some fairly bearish news for Bitcoin today. Regardless of whether you think the news matters or not, people are talking about it, which means it does matter on some level. For one, the possibility of quantum computing is scaring some people away from crypto, even if it's a decade away from becoming a serious threat. People react emotionally to any sort of news in this market. Secondly, the Lightning Network again has gotten some bad press. Losing 30K+ while trying to make a simple payment is not a good look. This is one of the main reasons why I don't particularly like Bitcoin. So far, the best cryptos for payments I've experienced are XLM and Nano. Nothing else I've used compares. Ethereum seems a bit iffy though, considering it relies more on the tech empires of the world having cash reserves, which becomes less likely if the global economy slows down. In any case, it seems to me that we could have a period for altcoins to shine, considering most have at least some advantages over Bitcoin (although Bitcoin's staying power and security have yet to be challenged). I'm seeing a fair amount of volume for ETH/BTC today. If the daily candle closes green and we get back above the 9D moving average, that would be very bullish for the ratio, considering we had declining volume for a while. That should indicate that ETH/BTC will test a major downtrend resistance (orange line with green X)
Look at this volume on the breakout of the downtrend channel (since Oct. 19th). And look on the volume on the retest. Could just be noise, but interesting nonetheless.
That's pretty much it from me. Looks like I'll have to start getting weirder ; )
As always, my posts are not financial advice. I'm not a professional financial advisor, and my posts/videos should be used for education and entertainment only.
-Victor Cobra
Note
The 50w MA for TOTAL has held. Note
Something I do a lot, which I haven't talked about much on this platform is volume analysis. Right now, we have declining sell volume on the weekly timeframe. On the hourly, we can see that it required nearly as much volume to send Bitcoin down $100 from $7500 to $7400 as it did from near 8K to $7500. We can also see a buy volume spike on the recent drop to $7300. This indicates that a lot of buyers have been lining up in this area. Many are hoping for a drop to 6.8K or 7.2K but there's a possibility we won't get there, at least not for a little while. On the weekly, we may actually be about to see a reversal back to the upside, as long as buying volume can step in and eclipse sell volume. Note
And there you have it. I really need to make a lost on volume analysis because it’s realy helped recently. My volume analysis predicted this bart back up. We’ve reclaimed the long term trendline for now, as bulls stepped in to try and rescue this market from further downside. The likelihood that this was our medium term bottom has now increased dramatically. If we can continue to hold above the trend, we may not see “slower growth” in the sense that returns will diminish. It just may end up taking much longer to play out, but provide similar returns to the previous bull market. If the trendline continues to hold, the 500B market cap for cryptocurrencies will be within reach.Note
Post* not lostNote
Bitcoin is now back in the bearish channel (as I described shouldn't happen in this video, for the bullish scenario). Things are still looking better for bulls than they were last week, but we should be very careful here. TOTAL is also in the bearish channel again
TOTAL2 looks much more indecisive, with powerful wicks on either side. What we want to see is these candles remain neutral (bulls will need to hold current levels) OR we'll need to break and hold above the bearish channels before weekly close.
Note
The video I mention in this update refers to the most recent video on my page.
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