BTC WEEKLY CHART: "The Panic Zone" We're Going To MARS
In the words of Alan Greenspan, you know the rumpled old geezer that speaks in rhymes, said something about irrational exuberance in the markets, I will invoke those same words. BEWARE OF IRRATIONAL EXUBERANCE in the bitcoin market.
What's causing this straight up spike in price? The China devaluation of the Yuan, the India currency confiscation, and here's a new one, the Brazil distrust and ejection of big government communists, have all laid a foundation of Bitcoin price support. It didn't hurt that Trump got elected, that the dark cloud of illegal immigration in Europe is causing a nationalistic resurgence, that Italian and other Euro banks are failing. These are all fundamental strengths. But what has taken place in the last 3 weeks in Bitcoin, a 50% gain, cannot go on forever. This is a classical setup to a blow off top. The Yuan is at a 6 year low relative to the dollar. This will not last. The cost to China industry for raw imports like coal and oil will be through the roof. China will move into recession/depression. Civil unrest there will emerge as jobs dry up from industry contraction. The Chinese government needs to stop the Yuan devaluation to preserve its control over the population.
NOTHING GOES STRAIGHT UP IN VALUE FOREVER. There will be an end, and it will be dramatic.
I kind of think that the big boys are looking to touch an all time high and then take profits faster than you can say WTF. What kind of evidence do I have? NONE. It's just a gut feel. So, I have loosely defined the top. Where's the bottom? There is solid support at $750.
My advice. Take down incremental profit into this rally. Don't sell everything because we don't know where the top actually is and we're nearing uncharted territory as far as the technical tools. Just take down the profit you feel you don't deserve. When the market drops down to rational support, re-invest the profit.
If the scenario plays out, the technical pattern will be a GIANT cup with handle formation. A breakout from the cup will have an approximate $2000 target. When? The cup is three years long. It could take another year for the beginning of a breakout. So, maybe, 2 years for a target. I'm still sticking to my $750 by mid February prediction although if the pullback shows signs of support at $950, I'll gladly raise my expectations.
What's causing this straight up spike in price? The China devaluation of the Yuan, the India currency confiscation, and here's a new one, the Brazil distrust and ejection of big government communists, have all laid a foundation of Bitcoin price support. It didn't hurt that Trump got elected, that the dark cloud of illegal immigration in Europe is causing a nationalistic resurgence, that Italian and other Euro banks are failing. These are all fundamental strengths. But what has taken place in the last 3 weeks in Bitcoin, a 50% gain, cannot go on forever. This is a classical setup to a blow off top. The Yuan is at a 6 year low relative to the dollar. This will not last. The cost to China industry for raw imports like coal and oil will be through the roof. China will move into recession/depression. Civil unrest there will emerge as jobs dry up from industry contraction. The Chinese government needs to stop the Yuan devaluation to preserve its control over the population.
NOTHING GOES STRAIGHT UP IN VALUE FOREVER. There will be an end, and it will be dramatic.
I kind of think that the big boys are looking to touch an all time high and then take profits faster than you can say WTF. What kind of evidence do I have? NONE. It's just a gut feel. So, I have loosely defined the top. Where's the bottom? There is solid support at $750.
My advice. Take down incremental profit into this rally. Don't sell everything because we don't know where the top actually is and we're nearing uncharted territory as far as the technical tools. Just take down the profit you feel you don't deserve. When the market drops down to rational support, re-invest the profit.
If the scenario plays out, the technical pattern will be a GIANT cup with handle formation. A breakout from the cup will have an approximate $2000 target. When? The cup is three years long. It could take another year for the beginning of a breakout. So, maybe, 2 years for a target. I'm still sticking to my $750 by mid February prediction although if the pullback shows signs of support at $950, I'll gladly raise my expectations.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.