BTC - Why Bitcoin Likely outperforms the Alt Market Short Term
Updated
Its been a few days since I have updated and this is due to the fact I was at the Bitcoin conference in Miami, doing interviews and getting some good information and insight. Matter a fact I met several guys from TV there and it was a great time to say the least!
But here we are a few days later, and market sentiment seems to still be bearish. Now its not overly Bearish as it was but a week ago, but non the less its still Bearish. People are still calling for $5000 Bitcoin or lower, and only a handful of TA's are long. So have we completed the WXY correction?
Wave "W" and wave "Y", labeled above, are very similar in structure with the exception of time. What I mean by this is that the "W" wave happened extremely quick but the "Y" wave happened over a broader time frame (5days vs 10 days). This to me is a sign that the final weak hands have been shaken loose of their coins, probably at the most in-op time. Another interesting point is both waves corrected 47%. Its amazing how herd psychology appears in patterns. But there are two more pieces to the puzzle and that is the 150 day EMA' and the June 2-17 correction. Below on chart A1 we have the overall move since 2015 of BTC' with the 150 EMA. Note how the 150 EMA was a support level. In addition there are similarities between this correction and June 2017's correction. Both "W" and "Y" waves were very close to being equal percentage wise, and both corrections formed similar patterns.
If you look at the A2 chart below I have 4 different coins all with the 150 EMA. You can see its mixed as to where many are in relationship to the 150 EMA. Some coins have gone through a WXY correction and have recently hit the 150 EMA and some have not. So why if many coins have not corrected would we be BTC' bullish here if the market overall alt market is likely to pull back more? For that we have to look at the September correction and chart A3.
Note that the it took the major alt coins almost twice as long to recover as it did bitcoin. Dash was the quickest to recover but that was almost a month after bitcoin had already reached a new ATH'. So does money start flowing into Bitcoin' before the rest of the market while the rest of the market corrects? History shows this is definitely a possibility.
Back to the chart above and where I am. I still have the position I bought higher, but I am also sitting on a stack of cash. I'm looking to add to two coins, one being Bitcoin' and the other being Dash'. I am looking at the 11k level specifically to add to bitcoin or a bullish signal with a "Preliminary" target area of $15,700 to $17,200. Can we still correct to $5000? Sure, we can also correct back to $9000 to form a double bottom, SO I am looking at the $10,500 level to hold as verification we do not correct further. But at this point scared money is likely gone. I mean if your scared you don't continue to invest after being crushed twice. In addition market sentiment is starting to change. We are still seeing a lot of short calls, but we are also starting to see some long calls as well. As the herd is generally late to the game I am looking to add to my position for a longer term trade, keeping in mind that the market overall is still correcting, so we can still retest $9000 where I would be a buyer.
Its important to come in with partial positions and not all ins during corrections as market direction is never clear.
I firmly believe 2018 will be the year Bitcoin and a few others become "safe havens" due to overall market conditions outside cryptos which I will explain in a separate article.
But here we are a few days later, and market sentiment seems to still be bearish. Now its not overly Bearish as it was but a week ago, but non the less its still Bearish. People are still calling for $5000 Bitcoin or lower, and only a handful of TA's are long. So have we completed the WXY correction?
Wave "W" and wave "Y", labeled above, are very similar in structure with the exception of time. What I mean by this is that the "W" wave happened extremely quick but the "Y" wave happened over a broader time frame (5days vs 10 days). This to me is a sign that the final weak hands have been shaken loose of their coins, probably at the most in-op time. Another interesting point is both waves corrected 47%. Its amazing how herd psychology appears in patterns. But there are two more pieces to the puzzle and that is the 150 day EMA' and the June 2-17 correction. Below on chart A1 we have the overall move since 2015 of BTC' with the 150 EMA. Note how the 150 EMA was a support level. In addition there are similarities between this correction and June 2017's correction. Both "W" and "Y" waves were very close to being equal percentage wise, and both corrections formed similar patterns.
If you look at the A2 chart below I have 4 different coins all with the 150 EMA. You can see its mixed as to where many are in relationship to the 150 EMA. Some coins have gone through a WXY correction and have recently hit the 150 EMA and some have not. So why if many coins have not corrected would we be BTC' bullish here if the market overall alt market is likely to pull back more? For that we have to look at the September correction and chart A3.
Note that the it took the major alt coins almost twice as long to recover as it did bitcoin. Dash was the quickest to recover but that was almost a month after bitcoin had already reached a new ATH'. So does money start flowing into Bitcoin' before the rest of the market while the rest of the market corrects? History shows this is definitely a possibility.
Back to the chart above and where I am. I still have the position I bought higher, but I am also sitting on a stack of cash. I'm looking to add to two coins, one being Bitcoin' and the other being Dash'. I am looking at the 11k level specifically to add to bitcoin or a bullish signal with a "Preliminary" target area of $15,700 to $17,200. Can we still correct to $5000? Sure, we can also correct back to $9000 to form a double bottom, SO I am looking at the $10,500 level to hold as verification we do not correct further. But at this point scared money is likely gone. I mean if your scared you don't continue to invest after being crushed twice. In addition market sentiment is starting to change. We are still seeing a lot of short calls, but we are also starting to see some long calls as well. As the herd is generally late to the game I am looking to add to my position for a longer term trade, keeping in mind that the market overall is still correcting, so we can still retest $9000 where I would be a buyer.
Its important to come in with partial positions and not all ins during corrections as market direction is never clear.
I firmly believe 2018 will be the year Bitcoin and a few others become "safe havens" due to overall market conditions outside cryptos which I will explain in a separate article.
Note
Note
Note
Note
Its important to exercise patience during corrections which is the reason we use Fibonacci to get an idea of market sentiment. Note this is playing out in the same trend pattern with the same retracement levels of the previous pullback. We want to see consolidation here and price action that confirms we move higher before entering. Entering too early puts us at the mercy of the market. A breakdown of the $10,500 level (2-3 hourly bars closing under the 10,500) would have us look for a lower entry level to buy. Right now its risk off and we MUST exercise patience. Note
I am going ahead and adding a half position here to cost average the previous trade. If we close above $11,500 I will add another half. This will be two trades on bitcoin but there is no other coin I want to be in during a market correction. 
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