Tag Archives: Bitcoin Mania

Bitcoin: Death March of GBTC

 

This Bitcoin Mania is going to go down in history as just another bubble.  Most bubbles return to their point of orgin which in this case is about the $1 dollar range.  A complete 180! This Bitcoin fund may have to execute an inverse stock split, so that would devastate any asset base it’s trying to hang onto.  After that it could flat line and never rise again, languishing at the 1-2 dollar price level. Billions of US dollar value evaporated and were destroyed.  When $527 billion evaporates, that does not foster confidence of some huge bull market to come. The planets asset world is going to meltdown, destroying $100 Trillion in the process, so Bitcoin’s price can still get crushed. There is roughly about $300 Trillion of assets in the world in US dollars, so only a third of it might get wiped out.

How would you like it, if 30% of all your asset values suddenly disappeared? We would not be happy campers to say the least. Protecting your cash will be critical, as paper assets and stocks are going to deflate in the next 2-3 years and those who are left standing will become the winners!

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Is The Bitcoin Bear Market Over?

In the last few days or so Bitcoin has been acting a bit different with an odd wave structure that does not fit well with the previous wave count. Some experts claim that the “correction” in Bitcoin is done with, and a new bull market in Bitcoin will start. A Bull market to where exactly? To be in a bull market Bitcoin has to exceed the old high of $20,000. Besides that, Bitcoin would have to fight past that $12,000 price level first.

Bitcoin is getting very close to breaking out, past my top trend line, and when I bring the bottom trend line up a bit, we end up with an inverted Megahone pattern.  Trend lines are subjective opinions at best, because they are used so much that they hold little information.

Wedges or inverted Megahone patterns can produce some wild thrusts so I respect those patterns, especially if they are Primary or Cycle degree Megaphones.  I will as much as I can,  keep two trend lines parallel to each other, and some Megaphone patterns when they might be sneaking up on us.

Bitcoin has become the currency that’s hard to spend: Don Pittis | CBC News

Here is a good story how a guy paid 10,000 Bitcoins for two pizzas back in 2010. This worked out to about $82 million for two pizzas!

The new ICO issues have started to slow down this week, but it seems that about 40 of them disappear over night from a peak of 1600 coin offerings. We are back down to 1564 coin offerings and the pace they are pumped out could be slowing. The 24 hour volume has hit close to 10 billion, which is down dramatically from its hay days. As I post Bitcoin is in a bit of a rally so chances of it breaking out past the trend line looks very good.

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Bitcoin Rally Update

Some experts have proclaimed that the Bitcoin rout is over and the next big bullish phase has started! What? Do they mean Bitcoin prices are going back above $19,000 again?  I doubt any big  Bitcoin bullish phase will happen, at least not until all 5 sets of Minor degree waves has completed.

You can hope, wish, pray and use Black Magic if you like, but doing those things will not help a bear market to miraculously turn into a bull market again. In order for that to happen Bitcoin needs buyers to come roaring back, but buyers are not coming back. Well over $500 billion has evaporated since the Bitcoin crash and there are no clear signs of this letting up.

Report: 9 Cryptocurrency Hedge Funds Have Closed in 2018 – CoinDesk

The news that hedge funds are closing their doors, is typical in a bear market. It also does not instill a lot of bullish confidence.  We are getting very close to the magic $6000 price level, where Bitcoins can get into another downside breakout position.  Another H&S pattern is also being created.

As of this morning I see that 1599 ICO’s have been issued. I watch this number for signs of it slowing down or even reversing.  Bitcoin prices could head up to the declining trend line, but then the bearish phase should resume.

I will not produce Bitcoin wave counts for every little turn as I will not produce mindless trade setups.  The Crypto market is a very small part of the big capital base and until it can show big cycles like gold or silver does, it is not an investment. If the new Bitcoin devotees talk about Bitcoin investing, then you better know the difference between investing and speculation. Most Bitcoin speculators have no clue what technical analysis is, never mind getting good at it.

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Bitcoin And Ripple Bear Market Review

Yesterday Cryptos suffered another down day with all Cryptos seeing red! Last week the Bitcoin price level did not hold as the bears are still firmly in control.

The thing is you can’t blame the short sellers as you need a long established market to get that far which no Crypto has done yet. Since early January the Crypto world has been in a bear market  and there is no end in sight at this time. Bitcoin has a lot further to sink and soon we will be up against that magic $6000 number,  and another huge double bottom. The majority of investors doesn’t know what a bear market is and they sure don’t know the difference between investing and speculation. Bitcoin has no established cycle patterns except for one big move up and now close to a 3 month trip down.

Many Bitcoin investors think they are smart, but since when is the crowd smart enough to know how to invest in a crashing asset class?  By “April Fools Day”  Bitcoin will be starting its fourth month in a bear market. One metric I use to see this bear market, is by tracking the total capital space.  This peak capital base ended at about $814  billion USD! On Thursday this number dipped to $256 Billion. At this time $558 billion US of investors’ money, has evaporated into thin air! This is a clear signal that the majority of Crypto investors has been losing money since 2018 started.

One other metric I use is the amount and rate that new ICOs are being issued. In a full week, this works out to an average of just under 20 per week, and by early April we would have 1600 ICOs ready and willing to steal investors’ money!

College students are secretly mining bitcoin in their dorms: ‘On room check days, I have to put a blanket over it’ – MarketWatch

When investors lose money, then the first thing they do is point the finger of blame at anybody else except themselves. . It’s never the stupid investors buying at “Mania” tops that get the blame, but the experts can dig up all sorts of reasons why Cryptos have been crashing. Wall Street is good at inventing financial instruments, as the 2007-2009 market crash clearly demonstrated! Remember all the toxic mortgage investments they came up with during that time?

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Bitcoin Still Heading South, With Ethereum Commentary.

From a list of about 1594 Cryptos, Bitcoin, Ethereum and Ripple are the top three and in that order. So far Bitcoin shows no sign of slowing down as yesterdays double bottom did not hold. We may have to wait until the next ice age before we will ever find the support for the next major Bitcoin bull market to come.

Of course that day may never come except for some surprise rally that will run out of steam as well. Iv’e kept my wave count about the same, but started my 1-2, 1-2 wave count. To extend a 5th wave decline I would be looking for at least three sets of 1-2 moves.  They may be waking up to the fact that Cryptos are not that safe as even Ethererum is taking huge losses. I don’t think Bitcoin investors realize the fact, when a bull market is over. Even in stocks, some  analysts can sense that the bull market is over. Investing and speculation are two different strategies and I loath it when they are talking about “Investing In Bitcoin”, even after it crashed from $20,000 down to $6000.

Some “Bitcoin” investors think there should be no crashes as they cry about it when they get wiped out.  All Cryptos started from zero and they sure can head back to zero. One main reason is that Bitcoin has no “intristic” value.  Anybody that makes a comparison, calling Bitcoin a “gold”  replacement has  little gold history knowledge. Ten years from now the only Bitcoins you may find are the collectors tokens we can import from China. I made a necklace with one of my Bitcoin tokens and I sold it right off my neck in a restaurant for $20!

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Great Bitcoin Robbery V2.0

The cryptocurrency market just suffered a theft worse than Mt. Gox – MarketWatch

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Bitcoin Intraday Swan Dive Update.

After a near perfect double top, Bitcoin succumbed to the bears and proceeded to implode. How deep Bitcoin can crash down on this trip remains to be seen, but if the inverted flat has any teeth to it, then the $11, 500 price level will not provide any long term support. All these Cryptos are used for speculation, and it’s only extreme leverage why these Cryptos make such wild moves. I’m not against any speculation, but when markets go down, they produce all sorts of fears. When fear dominates, then irrational decisions become obvious.

Last year saw a massive explosion of different Cryptos coming online, but early in 2018 it seems like new ICOs issues have hit a brick wall.  The last number to beat is 1385, related coin offerings. It will remain to be seen if 2018 remains bullish with many more ICO offerings, but sooner or later the weeding out process will start.

It’s still far too early, for any Gold/Bitcoin ratio calculations to be taken seriously, but spot checking the ratio every few weeks will help.

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Bitcoin Intraday Bullish Phase Update

Bitcoin has now moved well past any potential 4th wave rally in Minute degree, which means we have to start another wave count but from a different peak.  Could this present rally turn into the next bullish phase up? It could, but if that’s the case, then we have a long way to go with Bitcoin staying within the two trend lines.

It’s pretty hard to keep bulls caged up just by drawing pretty trend lines, but for any bearish move to continue, the bottom trend line must get sliced.  Also, any $11,500 price level will never hold, as bearish moves always need lower lows, to keep the Bitcoin bears happy. Even now, Bitcoin can produce another major double top, just to make it more miserable to count waves.  Volumes are not really exploding, so interest in Bitcoin futures is not exactly the greatest thing to get all excited about.

From my perspective, Bitcoin and all other Cryptos are just speculative asset classes, that many are calling Bitcoin an “investment”.  Any currency is just a medium of exchange to measure and compare, like any desktop ruler or measuring tape. Buying or owning a bunch of “rulers” has no intrinsic value. Sure, we can have numbers on these currencies, but in reality currencies are constantly shifting in value, but the numbers on the bills never change.

When currencies implode,  they just print something with an extra zero in front of the decimal point, and the semi full of cash can now fit into your basic wheelbarrow.  The longer Bitcoin takes in developing a new direction, the more impatient Bitcoin traders will get.

As of this morning there are now 1384 Cryptos on the list, and when new Crypto issues start to slow down, then this list should stop growing as well. The worst case scenario would be that the Crypto list starts to shrink or stagnate. This week I noticed the first possible sign of stagnation, but that could be just due to the holiday season or even a misprint.  I would like to have more evidence of this potential stagnation, which still could take weeks to clear up.

It now takes 12.26 gold ounces to buy one Bitcoin, which compressed a bit, from the 15.9:1 ratio I once calculated.

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Bitcoin Futures Update

So, you think that the Bitcoun bear market is over? Short term you may be right, but we could also just get the next leg down. This is the Cobe Bitcoin futures and until more volume shows up in the CME Bitcoin futures, I will stick with the Cobe futures charts. On December the 22nd, Bitcoins bottomed at $11,300, and have now surged back to a $16,500 high.

If the bearish scenario remains true, then this $16,500 price level should hold. Since the peak we had a $9000 drop in 5 days, followed by a $5000 rally in 5 days. This does not sound like a stable platform for any real world application, except for speculation. I will not keep a running wave count, but may wait until short term extremes are reached.

This Crypto Mania thing,  is nothing but pure speculation, and we have been warned over and over about the risks involved.

Heed Warren Buffett’s warning: bitcoin is pure FOMO – MarketWatch

Warren Buffett has been warning us about Bitcoin, and he has seen many Manias in his lifetime.

SEC.gov | Statement on Cryptocurrencies and Initial Coin Offerings

The SEC is also warning us about the Cryptocurrency Mania.

The biggest fraud that Bitcoin hype artists are making is that Bitcoin has “intrinsic value”! Bitcoin started out worthless and I’m sure that one day it will return to a “worthless” condition. The crazy notion that, “it’s different this time”, is all pure bullshit.  There have been many “Manias” in the past, and this Bitcoin Mania has a very close resemblance to the Dotcom Mania of the late 1990s.

There are now close to 1373 Cryptos on the list, and I don’t see that slowing down anytime soon. When it does, then the weeding out process will start and this crazy Crypto list will start to shrink.

At one time it took close to 16 gold ounces to buy one Bitcoin, which is now sitting around 12.2:1. We have no way of knowing what the extreme cheap side of the Gold/Bitcoin ratio can get to, because this could all just be a, “One hit wonder”. Bitcoins could end up with a flat line, like the Tulip prices did back in the early 1600s.  The cheap ratio I do have is about 1.74:1 which is a far cry away from any 12:1 ratio that we have now.

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Bitcoin Crash, Gold 2.0 Myth Busted

I increased the degree level to where the start is now a Minute degree. During the last 5 days Bitcoin crashed about $9000 and has now recovered a bit. From my perspective, I have not run into a set of good looking declining 5 waves in a very long time. Any little 5th wave acted like a diagonal, which makes Bitcoin wave counting an excellent experience. There could be more of this counter rally to go, but sooner or later the counter rallies will get bigger and take longer to play out.

I started the 1-2, 1-2, 1-2 count quickly, and so far have not had to change it, but may have to at a later date. Three sets of visible 1-2 waves will certainly give us a wave three extension, until the next 5th wave decline starts. If the last  5th wave contains many choppy wave structures, then that will help to confirm a new higher degree will be forming. Also, any 4th wave triangle that may form will also help in confirming our location.

Bitcoin plunges again, now down more than 28% since Sunday’s all-time high – MarketWatch

Unless I can see a clear zigzag or flat starting to set up, there will be no telling how deep Bitcoin can crash. We heard the stories about the myth that Bitcoin is Gold 2.0 which has now been exposed as pure bullshit. At one point $200 billion worth of Bitcoins evaporated in a puff of electronic smoke.

This Bitcoin crash changed the Gold/Bitcoin ratio form a peak of 15:1 to a bit under 11:1. This is not even close to the 3:1 ratio we did have at one time. Also, there is no guarantee that Bitcoin will ever rise from the ashes again.  At a 3:1 ratio Bitcoin would have to fall to $3800 USD, which is very close to the cost of mining one Bitcoin.   As of today, the Crypto count is about 1377, with no end in sight just yet. When the list stops growing or even starts to shrink, then this Crypto party is over.

Below, we look at gold and how it reacted to the Bitcoin crash during the same 5 days.

Gold, dipped a bit, but in most part gold completely ignored the crash of Bitcoin. Gold kept chugging along, pushing higher every step of the way. I think gold has more room to make gains in the short term, but it’s starting to form a nice spike on the daily charts.  I didn’t touch my bigger wave count as I just couldn’t find a more convincing alternative at this time. Either way this gold bull market has a long way to go in time, and price.  It’s not the top projected price that’s important, but the mood that will be present, is far more important. Also, the Gold/Hui, and gold ETF ratios should become very expensive.

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Bitcoin, Breaking Records On The Way Down

They use the Cobe futures contract for the CME Bitcoin futures. Each contract contains the price of 5 Bitcoins and is always the cash settlement price. They never have to take delivery once the contract expires.

I believe it is the secondary top, that I have that is the real top, followed by a declining  set of 5 wave sequences. I always start with my smallest degree level, which now contains a Miniscule set of 5 waves. Miniscule degree is the bottom of the barrel from a degree stack of 15. I can adjust the degree levels up or down if need be, but right now we would be heading down to a wave 1 in Minor degree which still could take weeks.

Any wave count I produce is strictly experimental in nature, but practicing in counting 5 declining wave structure is like a warmup for the stock markets when they start on their journey south.  I am not an expert on Cryptos by any means, but not counting a declining mania, is too hard to pass up. The new record low that hit this morning is 15,380. We have a long way to go, and at some point in time the pattern must form into a zigzag, flat or triangle “If” another big leg in Bitcoin is to happen.

Bitcoin created all sorts of records on the way up and now is set to make new records on the way down. Either way, we have the potential bursting of Bitcoin Mania,  or it’s just a huge correction. The next weeks and months will tell us more as Bitcoin price moves are very sensitive at this degree scale.

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Bitcoin Mania Review

I have no plans to give my readers trade setups regarding any Cyryptocurrencies as there are over 1369 Cyrptos like ICOs out already. Whoever names these asset classes, is very creative as it even puts the Dotcom naming to shame, during the late 1990s tech boom.  In any new Crypto like product launch, it brings out the crooks and scammers, to the point where the FCC is overwhelmed with cases and no longer allows trading, until it has time to investigate.

Without the bull market in the tech sector, this Crypto craze would never have started. If the Nasdaq starts with its huge bear market, I don’t think that these  Bitcoin mining companies will keep going up in price.

I created this wave position last night, but never published it until this morning.  Even though Bitcoin made a price jump, I did not have to change my wave positions. I believe that the spike to $20,000 is not the real top, but that the secondary peak of $19,650 is the real top.  All the wave counting in the world will make no sense if we don’t have a specific position to count from. I realized very early that using a higher degree in any Crypto currency,  gives us a false picture as to the size and scope of this potential bull market.  We are lucky to be anywhere near a wave 1 peak in Intermediate degree, but worse yet Bitcoin could implode and turn to digital dust, joining all the other failed attempts in the digital graveyard.

I call the top a wave “Zero”,  as this could be the  potential start of a Bitcoin bear market.  We don’t know what the Gold/Bitcoin ratio can still do, but two readings were pushing over 15:1. Would you buy one Bitcoin with 15.1 ounces of gold?  Gold has intrinsic value, and is a medium of exchange, which no currency in the world can provide. 10 years from now, what do you think will still be around, Bitcoins or Gold?

Since the list of the new ICOs has exploded, I think it is important to watch this list for when it stops growing, and actually starts to shrink. I’m sure there still has to be a huge,”weeding out” process to come and until we know who is left standing, anything can happen.

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Nasdaq And Bitcoin Mania, Two Peas In A Pod

While the Nasdaq gyrates around, and investors have long forgotten the 2009 bottom, then it’s always a good time to look back to the 2009 bottom. 

 Bitcoin Wave Zero, started in July 2010 about 15 months after the Nasdaq  turned around in early 2009. It’s silly to think that this crypto mania  is special or the start of a new era. There is nothing new about it as the markets have crashed when new electronic equipment was installed. 

While there is only one Nasdaq, we can’t say that about the Crypto Mania that’s going on.  Some think there are about 1000 different cryptocurrencies in the process of being created. Shit, that’s far more varieties of cryptocurrencies  than there ever was in different types of Tulips!

We are in a tech driven world, but so was the dotcom boom in 2000.  My bet is that once the Nasdaq starts to turn into a bear market, then Bitcoin will follow right along with it.  A  little 25%,  Nasdaq flash crash will not do it, nor will a 60% retracement do it!  We are going into a bear market that very few investors know that’s coming.

When all the experts are painting you a rosy bull market picture of the future, then “Who is left to get in”?  Like Rick Rules says, “Don’t confuse a bull market with brains”! Only emotional people buy in at the top, and they will run as fast as they can once the markets and Bicoin start to head south again. 

Yes, the pattern from 2000-2009 is ugly, but we know where the 4th wave bottom in Primary degree ended. The 5 waves up in the Nasdaq look like the closest to a well formed impulse that you can find. Many smart contrarians know this market is heading down, but we will never know exactly where it will find the real bottom. If I say the Nasdaq will eventually land at 1300, it will go to 1200 just to prove me wrong. 

Nasdaq can rocket to 8,000 and beyond, says Bank of America analyst – MarketWatch

                                                         This news link is a prime example, how bullish experts are at stock market peaks.

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Cboe Bitcoin (USD) Jan 2018 The First Few Days

This Bitcoin futures chart is just a few days old, and it would take weeks for the patterns fill out better. I don’t plan on making Bitcoin as part of my regular postings, but I will comment on Bitcoin about it’s mania status. I made a big mistake starting with a large degree sequence, as Elliott Wave doesn’t work that way. We have a wave zero starting location back in 2010, and we have a maximum of 5 waves in Minor degree.  Even then we may only be in a wave 3 of Minor degree, if it does not implode in the next few weeks.

They figure there will be close to 500 different ICOs (Coin offerings)  by the end of this year. This makes the dot.com bubble of 2000 look pretty tame, when compared to Bitcoin. The only reason Bitcoin is this high is because miners are hoarding Bitcoins.

The Inside Story of Mt. Gox, Bitcoin’s $460 Million Disaster | WIRED

I lost my Bitcoins when raiders hacked the Mt Gox exchange, and I see the same things happening today. Bitcoin bank robberies, hack jobs, and stealing wallets does not work well as an investment platform. I have calculated $3500 price drops in just 4-6 hours, so nobody in their right mind would hold a so called asset class with this much instability. The futures contract above (XBTF8) has seen low interest, as smart futures traders are staying away. 

Bitcoin charts with this contract is different than the Bitcoin charts I have been using as Bitcoin prices from the Coindesk site is heading for another record high.   

The Gold/Bitcoin ratio from about a year ago has surged from about 4:1 to a stunning 14:1 ratio. As of today it takes 14 ounces of gold to buy one Bitcoin. This may even become more insane in the weeks to come. 

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Bitcoin: Elliott Wave Zero

So you think it’s a good time to invest in Bitcoin? If you are, then consider the fact that you are getting in after about a  7 year bull market has already played out. In July 2010 Bitcoin started at Wave Zero, and within 7 years has soared about 285,000% or more.  

At this time Bitcoin prices have double topped at about $17,000 US dollars. The big question is, where does this Wave Zero fit into the bigger Elliott Wave sequence?   At one time I used Intermediate degree to count out Bitcoin, but I realized that this was far too high of a degree level to start with. Using too high of a degree, when complete corrections only take 4-10 hours does “Not” fit into any Intermediate degree time scale. 

Even the DJIA took a year or so to finish an Intermediate degree 4th wave correction, so why should the same degree only take hours to play out in the Bitcoin charts?  The plain and simple answer is, it can’t. Bitcoin has to start at a much lower degree level, at a minimum by at least 2 degrees. 

In other words, we could just be in a Minor degree wave 3 top, and Intermediate  degree wave 1 is still far away. $3000 price crashes in just hours does not fit an Intermediate degree move. The 2014 peak would fit better as a wave 1-2 in Minor degree. I show this chart to people  when they ask me about Bitcoin, and I always ask if it is smart to get into Bitcoins with a vertical chart  like this? 

Updated December 10

 

I thought I would add a candlestick perspective to Bitcoin. It’s a big mistake to think that Bitcoin is on some higher degree level if we don’t consider that Bitcoin started with a wave zero at about 6 cents.  At this posting Bitcoins double topped at about $17,000 is still holding, so if another leg up is to still to come, then the $17,000 price level will not hold. 

This Bitcoin Mania could have already popped which would mean “No More” highs will be coming.  A dozen other Crypto currencies are starting up, and none of them are accountable to anyone. It’s all private money and many are speaking out against this Bitcoin craze! 

The problem is that players in a mania don’t recognize they are in one, because if they did, they would have sold out last week. Greed keeps the players locked into a bull market, until panic sets in.  When the miners or hoarders start to dump Bitcoins all at once, then that $13,000 baseline will not hold. 

As far as I understand there over 16 million Bitcoins made, with a maximum target of 21 million.  This gives the Bitcoin market a 258 billion dollar capital base. Of course, once this Bitcoin bubble does pop, you will see all those billions go up in smoke. If you’re real lucky,  you might find them in the digital pit of hell! 

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December, 8, 2017 Bitcoin Mania Review

 

Trying to put a wave count to Bitcoin is an exercise in futility. The main reason is that the wave degree levels I’ve been using was far too large. Some of these wild Bitcoin moves are happening in 4-10 hours. One move Bitcoin dropped $3000 in just 10 hrs. Any 10 hour time period is not an Intermediate degree by any stretch of the imagining, so I dropped my degree levels a minimum of 2 degrees. My highest degree level now starts at Minute degree. 

Besides the degree level not even being close, there is another problem with the charts. In the downloaded chart above, we have two peaks with one peak ending just a bit above $17,000 per Bitcoin. This pattern is not what we see in real time on the charts, and it’s another reason why any wave counting is futile.  

 

This chart I clipped from Coindesk, and we can see a double top at $17,000. Everyone knows what a double top can bring, but it will not take too long to see if this double top will hold. My interest in Bitcoin is purely the crowd psychology aspect of it and all the wild stories about Bitcoin losses and robberies. The Bitcoin world is like the “Wild, Wild West 2.0” as every boom cycle attracts all the crooks and scammers as well. This has happened in every mania, I ever looked at, so it’s nothing new from my perspective.

Bitcoin is part of the bigger tech bubble, no different than the tech bubble of the late 1990s. I’m sure Bitcoin will go down in history as the all time greatest mania, ever!  The wild stories coming out about Bitcoin robberies, and massive data overloading, has shut down or crippled Bitcoin trading sites. Online wallets going missing, hard drives thrown away, does not sound like a system that is stable.

Bitcoin miners are hoarding Bitcoins, and they could decide to sell all at once. You can be certain that when they all do decide to sell, the price of Bitcoins will not remain where it is today.   

Money, or Bitcoin is just a medium of exchange, a tool to measure something to a piece of paper. That’s just like buying a bunch of plastic rulers, thinking they are an investment. Dozens of private Crypto currencies are coming out, with talk about the Fed issuing “Fedcoin.

Search the internet and you will find this world full of bubbles and manias, which is the most I have ever witnessed.

In the big scope of things we need a huge market correction to wipe out much of this delusional thinking, that is gripping  speculators in late 2017.    

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