Friday Inferno market update

Jul

Friday Inferno market update

#Bitcoin, #Blockchain, #Crypto, #Cryptocurrency

Analysis

TL;DR was that a fakeout? :/

Bitcoin is trying to figure out whether to moon or crash. From the high of $13,880 at the end of June to the recent low of $9,614 is a fall of around 31%, which is entirely in line for similar corrections during the 2017 bull market. Since that low, bitcoin managed to regain much of the lost ground, rising to $12,061 yesterday – an increase of 25%.

At the top of that move, bitcoin broke out of the broad downward channel it had settled into after coming off the high of almost $14k, suggesting another run at this key resistance level could be on the cards. However, bitcoin really needs to take out the $12,500 mark to stand a chance of making a new year’s high. If it does not manage that, it will likely revert to its previous downward channel, with the next low somewhat beneath the $9,000 mark.

Right now it’s struggling. BTC dropped sharply overnight, losing over $1,000. It is now sat on top of that downward channel, with the previous resistance line acting as support. If it drops through that and back into the channel, we can expect a further fall below $9k. The $12k blip would have just been a fakeout.

Sub–$9k would be a drawdown of almost 40%, which is harsh but not unusual for bitcoin in these circumstances. In November 2015, when BTC was finally starting to recover after the long bear market, it went into a parabolic rise to $500 before dropping to $300 – a 40% correction. After that, it never looked back.

Of course, there is always the danger that bitcoin would keep falling; parabolic rises frequently do give up the majority of their gains. Downside targets might include the 21-week exponential moving average, which currently lies around $7,500. That would be almost a 50% drop in price from the high, and would take bitcoin into proximity with the 61.8% fib retracement level from the bear market low to the recent top. This golden fib line also coincides with the 100-day moving average around $7,200 and is probably the most aggressive target we could expect without breaking market structure and falling further, potentially to devastating lows. But we’re a long way from that.

In other news, BitMex CEO Arthur Hayes and Nouriel ‘Dr Doom’ Roubini recently went head-to-head at a debate in Taipei. Both claimed decisive victories, but the video of the event has not been released so the public cannot draw their own conclusions. Roubini has seized on this as proof that Hayes lost and wants to conceal the fact: ‘Crypto is a mafia hush money racket. The blockchain conference organizers cowed and caved to BitMEX’s censorship and didnt tape or broadcast my debate with @CryptoHayes; he had his underlings make the only tape of the debate and is hiding it from view. Release that tape coward!’

Hayes replied: ‘Don’t worry our tapes will exposure your thin grasp of economics and technology. After seeing these tapes, I would be surprised if you were allowed into any higher learning institution.’

You can check out a summary of the main points raised here and make up your own mind.