Bitcoin Downtrend.

VSYNC said:

Not that they are a collective at all, but that they control the price by a large majority over it being some kind of natural occurrence relating to TA.

I guess the difference is you're saying something along the lines of TA's influencing institutionals, I'm saying it's the other way around.

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That would be because we both have a different perspective on the market. I'm saying if TA didn't exist, the patterns in the market would still exist, because this is human repetition as a collective. Thus the patterns are real, thus the institutions can use them to make money by reading them. That's what professional traders do, except they take FA and SA into account.

This is how markets work, the buyers determine the price.

I'd prefer to believe institutions have influence over media stations ect to influence the market, rather than actually manipulate patterns.

VSYNC said:

Sure but that's just one hypothetical.

About 40% of all BTC was held by 1,000 accounts in 2017.. prior to a huge influx of institutional money. At that point in time there were 20M BTC wallets on Blockchain.com.

So out of 20,000,000+ (by quite a bit taking into account other BTC wallets) Bitcoin wallets, 1,000 individuals or groups held 40% of all BTC, and since then the situation would have become more centralized.

So yeah, one institutional holding $2B of BTC in a hypothetical situation where the MC is 1T doesn't have a huge impact, but 10% of the top 1,000 accounts all moving based on the same data certainly would.

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That would assume a collective, that's quite big, and organised. Out of curiosity, why would an institution invest $1billion into bitcoin, if others are controlling it considering you said institutions are extremely smart and powerful? Or are you saying every single institution is in it together to control the price?

VSYNC said:

I'm curious what you think a whale is? The entire traditional market is controlled by "whales" as well. It's not some random single guy that happens to have a lot of an asset - it's the trading companies and institutional investors that run the market.

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I think whales are as you said, trading companies and institutional investors, that have a lot of money invested that can disrupt the market to some extent.

VSYNC said:

You think mainstream financial markets aren't manipulated because they're regulated?

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No, they are manipulated, however there are big organisations which combat this type of crime, so it's not as common, yet patterns will appear in every single market there is.

VSYNC said:

As an example that's a bit more concrete.. your original chart:

If the phenomenon you're seeing here is organic and just a case of bulls running out of steam, why are all 3 points perfectly aligned? Why does this always occur (or at least a majority of the time)?

Did bulls perfectly run out of stream just as the 3rd high met the trend line created by the first 2?

If it's organic and not orchestrated, these 3 points would be much more random, no?

So the exact points of these 3 highs are being controlled, we can see that obviously. In that case, how much of the position of these 3 points is based upon organic buying and selling, and how much is based on the control of market makers? It must be a large amount as a result of market makers, seeing as though the price is able to be aligned perfectly like that, right?

Really what's happening is that market makers (who are heavily tied to large institutional investors AND the exchanges themselves) control the creation of TA patterns, and they align the 3 lower highs like this, because it sends a message to all of the retail traders who are waiting to be told what to do next in order to make money.

This is the truth of the situation mate, not that bulls just ran out of steam 3 times and that happened to occur in a perfect straight line. It's basic logic tbh.

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I'm saying a lot of people use trend lines to exit, and that contributes, the 2nd lower high was not "perfectly alligned" as it's only the 2nd high. You can connect any two dots, but three is no longer a coincidence. The 3rd is following the trend line of the two. It's a signal which many do believe to be the exit point. People have to find exit points somewhere, and trendlines have been shown time and time again to be good exit points. And they enter if that trend line breaks.

To dismiss this as absurd, you would be stating that patterns are not natural, and thus every single market that has patterns, is manipulated? I'm yet to see a market that does not contain patterns, so from my perspective, your stating that every single market on the planet is manipulated.

I would say that's quite absurd.

VSYNC said:

https://www.investopedia.com/terms/r/reversal.asp
"False signals are also a reality. A reversal may occur using an indicator or price action, but then the price immediately resumes to move in the prior trending direction again."

I'm not saying that in your course it didn't tell you that 3 lower highs is a downtrend and that on investo it doesn't say the same, I'm saying that it's not reliable to believe that's anything other than an artificially-created paradigm which the considerations of actual psychology (ie. we make lots of traders think it's a downtrend then beartrap them) trumps pure TA.

As you mentioned, these are just opinions mate.. there's a lot to trading and it takes a long time to understand it properly. I've found it's much more about being able to read between the lines than to memorise TA patterns and rigidly abide by them.

imo, you have better success when you think of us retail traders as sheep and institutional traders are shepards, and then imagine why the shepards are telling the sheep to do things, instead of just what they are telling them to do.

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I think my point is, humans are not random. We generate patterns in every aspect of life, markets are no different. 3 lower highs indicating a downtrend is reliable to me, I use this tactic quite a lot and the majority of the time it works, which makes it reliable.

As I've said before, nothing is guaranteed.

Bitcoin is in a downtrend, that was one of my main points of the thread as per the title. You seem to have skewed a bit of topic there.. from my experience, a downtrend after an ATH on a long term graph indicates a long downtrend. That's just my experience, but again I never guarantee it, this is just what I trade on.

BTC falls are inevitable, however we should expect more of higher highs few days from now, this should possibly last till Tuesday.

Dark Sky said:

That would be because we both have a different perspective on the market. I'm saying if TA didn't exist, the patterns in the market would still exist, because this is human repetition as a collective. Thus the patterns are real, thus the institutions can use them to make money by reading them. That's what professional traders do, except they take FA and SA into account.

This is how markets work, the buyers determine the price.

I'd prefer to believe institutions have influence over media stations ect to influence the market, rather than actually manipulate patterns.

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I largely agree with you. Some kind of patterns would exist without there being a something known as TA, and they would be more organic.

Dark Sky said:

That would assume a collective, that's quite big, and organised. Out of curiosity, why would an institution invest $1billion into bitcoin, if others are controlling it considering you said institutions are extremely smart and powerful? Or are you saying every single institution is in it together to control the price?

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Well trading and investing in BTC are two very different things. Would you invest $1B into BTC if you knew there was a high likelihood that 12 months from now it will be 5X even if you knew that the market was largely controlled by other whales? Sure.

There's a hierarchy of control over the the market, and while those with millions of dollars of capital to trade with can control retail traders, what they absolutely cannot control is fundamental principles of mathematics and the Bitcoin blockchain.

They invest $1B irrespective of who controls the market because of the continual constriction of the supply of BTC leading to inevitable increased scarcity combined with the continual increase in demand as a result of the exponential growth of usage, further increasing scarcity.. It's an absolute no brainer.

Dark Sky said:

I'm saying a lot of people use trend lines to exit, and that contributes, the 2nd lower high was not "perfectly alligned" as it's only the 2nd high. You can connect any two dots, but three is no longer a coincidence. The 3rd is following the trend line of the two. It's a signal which many do believe to be the exit point. People have to find exit points somewhere, and trendlines have been shown time and time again to be good exit points. And they enter if that trend line breaks.

To dismiss this as absurd, you would be stating that patterns are not natural, and thus every single market that has patterns, is manipulated? I'm yet to see a market that does not contain patterns, so from my perspective, your stating that every single market on the planet is manipulated.

I would say that's quite absurd.

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I think to a large degree, the progression of financial patterns universally are controlled by deliberate human activity in one form or another, sure.

VSYNC said:

I largely agree with you. Some kind of patterns would exist without there being a something known as TA, and they would be more organic.


Well trading and investing in BTC are two very different things. Would you invest $1B into BTC if you knew there was a high likelihood that 12 months from now it will be 5X even if you knew that the market was largely controlled by other whales? Sure.

There's a hierarchy of control over the the market, and while those with millions of dollars of capital to trade with can control retail traders, what they absolutely cannot control is fundamental principles of mathematics and the Bitcoin blockchain.

They invest $1B irrespective of who controls the market because of the continual constriction of the supply of BTC leading to inevitable increased scarcity combined with the continual increase in demand as a result of the exponential growth of usage, further increasing scarcity.. It's an absolute no brainer.


I think to a large degree, the progression of financial patterns universally are controlled by deliberate human activity in one form or another, sure.

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I think we will have to agree to disagree, on the main point at hand here. I think cryptos are being manipulated, I have no doubt. I know whales are manipulating it. However I think they only control the start of a bull run and the start of a bear run, I don't think they control patterns, they probably could if they all came together. But this is about taking money from regular people, and transferring the wealth.

After a bull run like this, there is not much left to take from regular people, need to let them get their savings back from regular employment, then initiate a new bull run. The further they drop the price for the next bull run, the ROI increases exponentially for them.

But I feel like you have contradicted yourself, you have said the whales control the price, and can do whatever is more profitable for them, but you said this cannot reach 10k unless something is seriously wrong. But dropping the price to 10k is incredibly profitable for them? So using your logic this is incredibly likely?

Dark Sky said:

But dropping the price to 10k is incredibly profitable for them?

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Dropping it back to $50 and then bringing it back to $42,000 would be a return of 840X.. why don't they do that?

I think that question is a lot more complicated to answer accurately than just a single line tbh, but shows the difference between what traders would consider reasonable and what they would consider unreasonable. At that point, the manipulation would be transparent to even the newest trader.

The difference between yours and my perspective on the $10K thing is where we both draw the line of what we believe traders would consider to be a reasonable drop with everything taken into context.

VSYNC said:

Dropping it back to $50 and then bringing it back to $42,000 would be a return of 840X.. why don't they do that?

I think that question is a lot more complicated to answer accurately than just a single line tbh, but shows the difference between what traders would consider reasonable and what they would consider unreasonable.

The difference between yours and my perspective on the $10K thing is where we both draw the line of what we believe traders would consider to be a reasonable drop with everything taken into context.

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It's not too complicated, it's based on the value of bitcoin, which is based on the adoption.

A good analogy too explain would be the shares of a company.

The share price doesn't tend to drop below the value of the contracts the company has, because it doesn't make sense.

So if a company has £500,000 of contracts, and they have 10000 shares to give out, the share price typically won't go below £50, because then it's a steal.

Same with bitcoin, based on the adoption, amount of people who HODL and how much it costs to mine, it typically won't go below a certain amount. I guess 3k was roughly that amount back in 2018 when it dropped fully.

10k is my rough guess for 2020, which is why I'm expecting it around 10k, anything above I would consider to be overvalued. That's why they can't force it down to $50, because their is a fundamental value on it. To get it to $50, you would have to reverse the adoption, which is almost impossible and doesn't make sense profit wise.

Is ether repeating the path of bitcoin?)

bitcoin will continue to decline strongly

Dark Sky said:

It's not too complicated, it's based on the value of bitcoin, which is based on the adoption.

A good analogy too explain would be the shares of a company.

The share price doesn't tend to drop below the value of the contracts the company has, because it doesn't make sense.

So if a company has £500,000 of contracts, and they have 10000 shares to give out, the share price typically won't go below £50, because then it's a steal.

Same with bitcoin, based on the adoption, amount of people who HODL and how much it costs to mine, it typically won't go below a certain amount. I guess 3k was roughly that amount back in 2018 when it dropped fully.

10k is my rough guess for 2020, which is why I'm expecting it around 10k, anything above I would consider to be overvalued. That's why they can't force it down to $50, because their is a fundamental value on it. To get it to $50, you would have to reverse the adoption, which is almost impossible and doesn't make sense profit wise.

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Well I mean, sure.. it's pretty obvious that the more people buy and hold Bitcoin the higher it's price is, and the more people sell it the lower its price is. That's certainly not too complicated to explain in a single sentence.

The reasoning for why whales don't initiate random flash crashes and push the price of cryptos down to 5% of their previous value in order to vacuum up cheap crypto and then pump it thousands of % before dumping it when it would be incredibly profitable to do so is more complicated than what can be explained in a single sentence.

How did you do in the 2017 bull run btw?

it must be understood that since bitcoin begins to operate in the futures market it is no longer "independent"
It is not what it used to be, now the market manipulates it as it wants, those movements are intentional and it is a matter of studying a little to get on the waves and make money.
It is also good to train and understand how the markets move and their manipulation, basically where the large funds trade

bitcoin movements are now the same as the futures of the American market, I do not mean that they move in the same direction, they simply have the same pattern.
For example, like the sp500 index (ES) or like oil futures, it doesn't matter.
the technique is the same.

I think its increase ...

VSYNC said:

Well I mean, sure.. it's pretty obvious that the more people buy and hold Bitcoin the higher it's price is, and the more people sell it the lower its price is. That's certainly not too complicated to explain in a single sentence.

The reasoning for why whales don't initiate random flash crashes and push the price of cryptos down to 5% of their previous value in order to vacuum up cheap crypto and then pump it thousands of % before dumping it when it would be incredibly profitable to do so is more complicated than what can be explained in a single sentence.

How did you do in the 2017 bull run btw?

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Yeah so it kind of has a fundamental value to it, anything above is overpriced,

They don't constantly pump and dump because they can't, they exhaust the market after a pump and dump this big. Take a look at smaller cryptos, they were getting pumped and dumped every week in 2018, because the markets weren't exhausted with such small volume,

I did quite well, I started with around $200 and made around $4000 on BTC and alt coins, I exited BTC the second I saw them smaller highs come in, and I kind of left it there and temporarily suspended trading as I didn't want to get caught in the downtrend, I didn't know enough at the time to even attempt trading the downtrend, I got rekt on a few alt coins though with the pump n dumps going around, I've avoided small market caps since,

How did you do?

it is important to study how market cycles work.

All those who are claiming that Bitcoin will fall are the ones who missed the train and now wishing for its fall so they could buy it low. Too bad it ain't gonna happen.

Dark Sky said:

Yeah so it kind of has a fundamental value to it, anything above is overpriced,

They don't constantly pump and dump because they can't, they exhaust the market after a pump and dump this big. Take a look at smaller cryptos, they were getting pumped and dumped every week in 2018, because the markets weren't exhausted with such small volume,

I did quite well, I started with around $200 and made around $4000 on BTC and alt coins, I exited BTC the second I saw them smaller highs come in, and I kind of left it there and temporarily suspended trading as I didn't want to get caught in the downtrend, I didn't know enough at the time to even attempt trading the downtrend, I got rekt on a few alt coins though with the pump n dumps going around, I've avoided small market caps since,

How did you do?

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So the fundamental value is the cost of mining a BTC + the amount of adoption with people buying and holding BTC, but at the same time if too many people buy and hold it then it's overpriced, even though that's also it's fundamental value because they're the ones adopting?

Yeah I was happy with how things went in 2017, both bull runs so far did well and aiming to do better in this one.

Backed a few ICO's in 2017 that did well, one that didn't. Got in on EOS on the first day and then rode most of the run with it which was probably the highlight.

Anyway, I'm waiting with baited breath now to see if your prediction comes through.

@Dark Sky
For quite a while this has been roughly my thoughts of what's going on man:


Obvs we have different thoughts on the situation, so understand you don't think this is accurate, but just putting it here anyway because it's an interesting model.

What's quite weird is the current progression is actually way more rapid that you would expect and where we're at now (according to this model), could make sense in many ways if this was the top (as you're suggesting).

Each run the top is linearly lower than the previous two (drawing a line from them, the next ATH is lower), and so if this was the top it would make sense in that respect. Also, the shortened duration of the run from bottom to top could be congruent as well, so in many ways I think your suggestion could align with what's happened in this model so far.

Saying that, I still could see two scenarios playing out that are more likely (if this model continues to hold up that is).

- we see a hard run now from current levels up to above $100K by March/April this year, slight pull back there, then a run to 250K+ by the end of 2021. (I don't think many people think this is likely, but it's the only realistic way I can see some of the predictions of $200K+ by the end of the run manifesting).

- pull back very slowly to around $22 - 25K over the course of weeks to months even (maybe even until mid year-ish) and then a run up to 100K range by the end of the year.


But yeah, thought it was interesting that from a different angle you could interpret this model and understand a way that this could be the top of the run, in which case your $10K prediction would be more realistic.

I think if that was going to happen though it would have to be a hard, sharp sell off from here, and as I said I think of all 3 scenarios it's the least likely, but on the cards none the less, although that would mean that this was the first run that didn't beat the white line (predicted trend), which is why I think that makes it a lot less likely.

If you look up Plan B's stock-to-flow model and his twitter, you'll see it's one of the most historically accurate models for the prediction of the long term price of BTC out there.

VSYNC said:

@Dark Sky
For quite a while this has been roughly my thoughts of what's going on man:

​

Obvs we have different thoughts on the situation, so understand you don't think this is accurate, but just putting it here anyway because it's an interesting model.

What's quite weird is the current progression is actually way more rapid that you would expect and where we're at now (according to this model), could make sense in many ways if this was the top (as you're suggesting).
Each run the top is linearly lower than the previous two (drawing a line from them, the next ATH is lower), and so if this was the top it would make sense in that respect. Also, the shortened duration of the run from bottom to top could be congruent as well, so in many ways I think your suggestion could align with what's happened in this model so far.

Saying that, I still could see two scenarios playing out that are more likely (if this model continues to hold up that is).

- we see a hard run now from current levels up to above $100K by March/April this year, slight pull back there, then a run to 250K+ by the end of 2021. (I don't think many people think this is likely, but it's the only realistic way I can see some of the predictions of $200K+ by the end of the run manifesting).

- pull back very slowly to around $22 - 25K over the course of weeks to months even (maybe even until mid year-ish) and then a run up to 100K range by the end of the year.


But yeah, thought it was interesting that from a different angle you could interpret this model and understand a way that this could be the top of the run, in which case your $10K prediction would be more realistic.

I think if that was going to happen though it would have to be a hard, sharp sell off from here, and as I said I think of all 3 scenarios it's the least likely, but on the cards none the less, although that would mean that this was the first run that didn't beat the white line (predicted trend), which is why I think that makes it a lot less likely.

If you look up Plan B's stock-to-flow model and his twitter, you'll see it's one of the most historically accurate models for the prediction of the long term price of BTC out there.

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I do like that model, I agree with it, I do believe bitcoin will reach a million. But I just can't see another long term uptrend until the next bull run. I see this as the pullback what we are in now.

The reason I am confident in my decision making on this so much, is I've sold all my bitcoin, every penny. I'm no longer invested emotionally. My analysis is purely logical and has no emotions involved.

I know this is controversial, but it reflects 2018 bull run quite well. And it's reflecting this bull run quite well too. This is based on the belief that the market is psychological as a collective, and I do believe cryptocurrency is. Most people cannot put their emotions to one side once they invest, and thus the psychology trading plays on it.

My favourite part is the "Depression" where it hits a price which is incredibly lower than anyone thought it could be after it reaches the peak. In 2018 it dropped from 20k to 3k. That's nearly a 70% drop.

40k to 10k is only a 25% drop. I don't see why this seems so unbelievable to a lot of people. Humans do repeat their selves emotionally and psychologically, and I don't believe the 2020 market of crypto is an exception. It's just not logical.

Out of curiosity, are you invested in bitcoin at the moment? I've personally transferred my investing money into stock markets of undervalued companies, so my opinion on this is truly unbiased. I think bitcoin is a great tech, and it will reach 1 million, but I think we are aiming for 10k prior to the next bull run, and I don't think it's going above 40k until the next bull run.

Dark Sky said:

In 2018 it dropped from 20k to 3k. That's nearly a 70% drop.

40k to 10k is only a 25% drop. I don't see why this seems so unbelievable to a lot of people.

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3000/20000 = 0.15, so 85% drop.
10000/40000 = 0.25, so 75% drop.

There's nothing saying the price of BTC can't drop by 75%, but the question is whether right now a bull run has just finished, or it's only started.

Neither of us know for sure, and we understand each others' perspectives so no point rehashing.

Incidentally though, the drop of 85% occurred over 12 months and coincided with the "bull run/bear market" Bitcoin cycle perfectly. My opinion is that if a drop of anywhere near to 85% occurred now it would be out of place, but also that if a drop of anywhere near 85% occurred at a speed of weeks or months, it would be exponentially more out of place compared to that taking 12 months of continuous selling previously.

Dark Sky said:

Out of curiosity, are you invested in bitcoin at the moment?

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I'm invested in multiple cryptos including BTC.

Being invested in something doesn't automatically mean you're emotionally investing, and not holding something doesn't mean you're not.

I have a vested interest in the price increasing from here, you have a vested interest in it decreasing. Ideally we would both be making our decisions in a non-emotional way, however it's unrealistic to imagine than anyone other than a trading algorithm has literally 0% emotion attached to their decisions. You or me.

Dark Sky said:

I've personally transferred my investing money into stock markets of undervalued companies

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Probably not a bad idea. I'm wary of the stock market and traditional markets in general right now with the uncertainty in the world and the mass production of USD recently.

But depending on how things go with Biden and the virus, it might be a very good investment to aim for undervalued stocks.

Something else that is really worth considering.. take another look at the chart:

In both the 2013 and 2017 bull runs, the optimal exit point is the very beginnings of the yellow dots as they transition from orange.

In both the bear market after the 2013 run and the bear market after the 2017 run, the optimal entry point is when the green dots start to become dark green.

Right now we're at red dots, just beginning to turn orange. Have a look at the previous two bull runs where the dots are red and just beginning to turn orange, then consider the remaining growth in both cases until the price gets to the optimal exit points at the beginning of the yellow dots.

This model is seriously one of the most accurate models based on historic price movements, if not the most.

Past doesn't ensure the same will happen now, but it's worth considering that there's a map right there showing how things typically play out.

In 2013, the increase in the price of BTC from the beginning of orange dots until the beginning of yellow dots was from $100 to $1100.

In 2017, from $1100 to $20000.

1100/100 = 11X
20000/1100 = 18X

Worth considering.