BTC - Market Sentiment Greed and Fear!
Updated
The past couple of weeks have seen the market overall soar to new highs. Unfortunately I can not post the chart of the overall market cap, so you will need to pull it up yourself. On the log chart it is a steady sloping linear line for which we have recently diverged to the upside from the overall mean. Now in general, equities can stay overbought or oversold longer than we can stay liquid, which is one of the reasons investors outperform traders in the long term. A market correction can cut through stop order erasing a month of gains in an instance; however, as an investor we just sit still and let the market cycle through looking for beaten down coins to add to our position. Overall the trend is still up!
I am at that point again where I am closing out trades, and going to cash. Now I will be clear once again I AM NOT SELLING MY CORE HOLDINGS, even though I have adjusted them recently in order to add some speculative coins and to bulk up on the coins I think have the best chance of making coinbase. Clearly from the market movement of BCH', listing on coinbase is a positive. There was no selloff as many anticipated as the influx of money into the space and the desire to have exposure to a diversity of coins will drive demand! Now I have my list which I shared, and though many disagreed respectfully, it is my list! #1 is now listed! I added to XRP yesterday as I think they add faster than we thought due to demand.
But BTC' is still the market leader and the chart has turned bearish recently. Sentiment can change on a dime, and that was evident last night after the listing of BCH'. Though it recovered, it is showing clear bearish signs. This could be cyclical or the initial signal for an overall market correction. After 300% plus move in a month in alt coin market cap I would not be surprised to see some profit taking here. I have and I'm sure others will too, but with the amount of new money flowing in daily this may be short lived, which is why I am neutral and want to be in a position to buy quality coins on any dip. The overall market cap of coins failed to break to a new high. Now anything can happen but when I'm up 300% in a month I am taking in some profits and adjusting my portfolio.
BTC' is what I'm watching here. On the chart above we clearly have pulled back into correction territory but this completes the (v) wave and the mid term wave iii'. Looking at the previous pullbacks we can expect a correction to pullback between the 0.382 and 0.5 retracement levels of wave iii'. So am I shorting here? Heck no! I'm tightening down the hatches and will ride out a storm if we get it. I like to look at correction patterns and the last few have been bought up quickly. We are not seeing that here instead we are getting a rounded top. This is similar to the top we saw in November (see chart below). Noticed we pulled back to the 0.382 to 0.5 retracement level. Do we do that here? We have to monitor to see how it evolves as we could retest 20k one more time. I will look to add on a pullback to the 12-14k area. A break of 11k would signal we have the wrong count and have actually completed wave v5III. So a pullback as low as $6000 is possible which would complete the IV' wave setting up for a final rally. To be clear long term we move higher in my opinion.
Bottom line corrections are difficult period. We could easily retest the ATH' or surge higher from here. We can also correct fully. This is why I am neutral and will let the market provide direction before I re-enter trading. I would rather lock in profits and look for a deal in a continued bull market then ride my profits back into losses. Sentiment is bullish as evident by the charts calling for 500%+ trades after 300% runs.
Warren Buffet "Be fearful when others are greedy and greedy when others are fearful".
I am at that point again where I am closing out trades, and going to cash. Now I will be clear once again I AM NOT SELLING MY CORE HOLDINGS, even though I have adjusted them recently in order to add some speculative coins and to bulk up on the coins I think have the best chance of making coinbase. Clearly from the market movement of BCH', listing on coinbase is a positive. There was no selloff as many anticipated as the influx of money into the space and the desire to have exposure to a diversity of coins will drive demand! Now I have my list which I shared, and though many disagreed respectfully, it is my list! #1 is now listed! I added to XRP yesterday as I think they add faster than we thought due to demand.
But BTC' is still the market leader and the chart has turned bearish recently. Sentiment can change on a dime, and that was evident last night after the listing of BCH'. Though it recovered, it is showing clear bearish signs. This could be cyclical or the initial signal for an overall market correction. After 300% plus move in a month in alt coin market cap I would not be surprised to see some profit taking here. I have and I'm sure others will too, but with the amount of new money flowing in daily this may be short lived, which is why I am neutral and want to be in a position to buy quality coins on any dip. The overall market cap of coins failed to break to a new high. Now anything can happen but when I'm up 300% in a month I am taking in some profits and adjusting my portfolio.
BTC' is what I'm watching here. On the chart above we clearly have pulled back into correction territory but this completes the (v) wave and the mid term wave iii'. Looking at the previous pullbacks we can expect a correction to pullback between the 0.382 and 0.5 retracement levels of wave iii'. So am I shorting here? Heck no! I'm tightening down the hatches and will ride out a storm if we get it. I like to look at correction patterns and the last few have been bought up quickly. We are not seeing that here instead we are getting a rounded top. This is similar to the top we saw in November (see chart below). Noticed we pulled back to the 0.382 to 0.5 retracement level. Do we do that here? We have to monitor to see how it evolves as we could retest 20k one more time. I will look to add on a pullback to the 12-14k area. A break of 11k would signal we have the wrong count and have actually completed wave v5III. So a pullback as low as $6000 is possible which would complete the IV' wave setting up for a final rally. To be clear long term we move higher in my opinion.
Bottom line corrections are difficult period. We could easily retest the ATH' or surge higher from here. We can also correct fully. This is why I am neutral and will let the market provide direction before I re-enter trading. I would rather lock in profits and look for a deal in a continued bull market then ride my profits back into losses. Sentiment is bullish as evident by the charts calling for 500%+ trades after 300% runs.
Warren Buffet "Be fearful when others are greedy and greedy when others are fearful".
Note
Note
I noticed at this time the Jan futures contract is in backwardation which is a bearish market signal.Note
I do want to be clear. If you have followed for a while you will note I normally add trades to breakouts of consolidation boxes or add after pullbacks and consolidation. This is just my method which is a hybrid of the Darvas and or Minirveni's trading method mixed with long term investing. Example we bought 10 BCH @$300 and then added 2 coins upon breakout around $460 as in bull markets equities that make ATH's tend to keep making them. At $1400 we sold off one coin. I then sold the other yesterday. So now that little trade that was added has put us in BCH for nothing plus some. This puts us in a no risk situation. Pulls back and consolidates we can add a trade again, runs higher, we are still in!
Unfortunately I do not have time to post every trade. But this is the concept that I implement. You can see that this is not a get rich quick method because we wait and wait for these moments, but over a period of time you will find yourself outperforming most traders as you cost average coins down. It is a hybrid of investing and trading and I am still tweaking it for cryptos.
As an investor we never miss out on big rallies, as traders we use profits to reduce position with the intent of eventually being into our coins for nothing and have no risk. This also allows us to expand our portfolio which we have. Adding coins like Decreed, or speculative coins like "dragon coin", "ADA" along with a few others and never having to touch our core holdings or add additional funds. Be careful etherdelta was hacked yesterday.
Note
Just when you thought it was safe to go into the water! To think I just bought my Monero position back ;(Note
When weak hands panic, strong minds are looking for deals and levels to add. Note
What I love about the futures market as it often gives us a warning prior to a pullback. Note above on the 20th we posted market in backwardation which is a bearish signal. Now this could have been a false signal as trading is still light, but its something we look for.Note
I see so many charts, so after the stress today I thought I publish this one to share and provide a little humor. 
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