Market outlook (11/18): No bulls in sight

Markets

OK, this blog is not about TA. I’ll only post such analysis at important moments and only if it includes FA. Since we dropped like projected, the “now what” is showing its ugly head.

Image taken from Murad Mahmudov‘s analysis.

Short-term

I thought the move below the yearly support after numerous tries would be more violent. That was a measly $700 move which shows that the breakdown was largely expected. Volume was mediocre and quickly subsided. No immediate retest was made. I’m interpreting this as a bad sign, and if the market is not interested in these price levels, we are in for a further journey down.

Coming weeks: If retest happens, there’s now a very strong resistance at $5.8-6K, which is a perfect short entry. Otherwise, we can keep ranging or make another move down until the market shows some proper volume/volatility.

Mid-term

Technically, it looks like we are in the middle of this bear market. No capitulation; social media sentiment is full of hopium — it means traders still have money to lose. Coinbase has added sub-$1 tokens, and retail is just not there. Currently, there is not a single reason to assume we get to rise again any time soon.

There is a couple of fundamental events coming up, though: Bakkt and the VanEck ETF.

Bakkt is a wildcard. It’s a new beast which nobody talks about. As a physically settled instrument (i.e. Bakkt will need to buy spot Bitcoin for customers) it makes an ETF completely redundant. However, we don’t know if institutional investors are going to use it. It can be as impactful as a much-anticipated ETF, or it can go unnoticed. With Bakkt we won’t know until it actually does something.

The possible approval of the VanEck ETF in February 2019 is a more visible event, though. This particular ETF has the biggest chance to be approved so far. If that happens, dump all your alts that you are carefully accumulating right now, because Bitcoin goes straight to ATH.

Fundamental events like Bakkt and the ETF can spark retail FOMO which moves markets. Organic exhaustion requires more time because even now not all Joe’s are rekt and gone. New generation can’t be born before the old is dead.

Long-term

Bitcoin continues its parabolic tech adoption curve. We can thank the halving algorithm for making Bitcoin cycles as orderly and predictable as it gets. Halving is borderline used car salesman marketing tactic. And it works because we are simple creatures. People like narratives and only-21-million-will-ever-exist is one of the first things you hear from Bitcoin maximalists. But halving takes it to the next level.

I expect the halving of 2020 to start getting priced in 3 quarters before the event, so if all else fails we get our spark mid-2019 at the latest. Accumulate accordingly.

Obligatory disclaimer: This is not financial advice. You deserve to lose all your money if you do what biased strangers on the Internet tell you.

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