Weekly roundup
Usually we will get out market forecasts and analyses during the week but I think a weekend roundup is in order. Here it will be a little more informal and news will cross into our speculative realm as we try and see where things may go in the future. That said, we will still have some technicals to look at and today is no exception. Let’s zoom in past our usual look to the 15 minute mark:
https://cryptowat.ch/coinbase/btcusd/15min
This chart shows that there has hardly been any actions up or down but there has been a slow negative slide all day. Now we can get to some speculation, news, and asking why. This is where we ask why the market price is performing as it is: where there’s wider adoption, higher transactional volume, and eventually more inherent value added to bitcoin. We might picture this as traders seeing this low price market as a buying platform and pushing a price rally up and up. Unfortunately the technicals are not supporting this notion right now since the volume just is not there.
Coinbase Exchange Price Depth
Good news and markets
Let’s talk some about how news in the bitcoin space and how it may or may not impact the market. Another article explored the impact of news and movements within the market and looked at subjective positivity and negativity in response to various news announcements. The author determined:
“What, then, determines market direction? The collective action of buyers and sellers, of course. More sellers and the price goes down; more buyers and price goes up. The mass of buyers vs. sellers is determined not by the actual content of the news – its relative positivity or negativity – but by a more basic factor: the market participants’ collective sentiment, or “social mood”.”
Elliot and the wave
Social mood is an excellent way to describe the market actions in response to various news announcements and is consistent with the Elliot wave principle school of thought: where markets are moved by the collective mood of all traders, movers, and shakers participating in the market at any one time; exactly what this author has described as social mood. We can see this phenomenon in today’s technical’s as a kind of delayed action where news announcements have already passed and sell orders are stacking up like firewood. Indeed, the market would seem to be solidifying around a slight negative trend and the result is an overall price decrease. I mentioned in yesterday’s market watch that now may be a good time to watch for new lows to acquire coin for less and setup well for some short positions; I hold to this sentiment and I will definitely be picking up coin in the next few days.
Volatility and possible bubbles
I unfortunately cannot source all of my materials but one of them described it well with the following chart and quote:
“I think the other members have given a pretty good overview of the charts. To give some history, last year I discovered that the bubbles occurred after periods of very high price stability. However, we have very few observations of this happening, so this doesn’t guarantee that 1) high stability means a bubble is coming or 2) a period of stability is necessary for there to be a bubble.”
I really, really enjoyed this analysis and the way that they broke down bitcoin stability and price spikes. We have had a lot of stability recently and our friend here would argue that after a period of relatively high stability there may be a bubble that could help to explain the negative pressure we have observed so far. I would not say that we are on a bubble right now but everyone is looking for why and this is something. I will admit I have shifted from a bullish outlook to a more bearish stance and this is not a bad place to be in order to hold long term and wait until the positive trends return; the market is definitely in for the long haul.
Recommendations and care
Market watch will be back for Monday with more recommendations but no trade recommendations for now, just watch any positions carefully and evaluate as necessary. If you solidify positions in USD for now I would not blame you at all but right now is ripe for picking up cheaper coin. Here’s the last chart for today and I have followed it so far for some of my positions.
