Tag Archives: Gold/Bitcoin Ratio

Intraday Bitcoin Review: There Is Only One Of 3 Ways it Can Go!

Any basic chart is a two dimensional thing and no 3-d or holograms will form. North, South or East are our only three choices. For all of March so far Bitcoins have been heading South, or South-East. Will it break out, slice the top trend line and head North again? My wave counts are very speculative and can get trashed as soon as they are posted.

I’m working a basic diagonal set of 5 waves heading down a potential 5th by one higher degree. This is a pretty deadly combination, as normally it would signal the end of a bearish phase. The problem with that is that Bitcoin has “NO” track record of establishing big cycles. Every asset class has huge cycles in it, but Bitcoin is only heading down?

From my Cycle degree perspective a true bull market will consistently leave old highs in the dust, but Bitcoin is no longer doing that. Bitcoin has been in a bearish phase for well over 3 months, (all of 2018) which could just be getting started.

To be in a real bull market, the $20,000 price level must be left in the dust! How long are those investors going to hang onto Bitcoins if it keeps falling in price? They will get pissed off and when they try to sell them, they find out they can’t get US dollar back into their checking accounts. The flow of US dollar cash has to flow into your home account smoother and faster than it goes into your Bitcoin trading account.

All the Bitcoins in the world will be no good, if there is no smooth flow of funds back to you. My personal guideline is, if you can’t get your money in less than 5 business days, then chances are good you don’t own it.

College students use financial aid money to invest in bitcoin – Business Sector

Warning, crypto investors: You must pay taxes on your bitcoin – MarketWatch

Most of the Bitcoin winners will find out the hard way when the IRS hounds them for not paying income tax on their Bitcoin sales.

The Gold/Bitcoin ratio has compressed from about 15:1 to a present 6.4:1. It now only takes 6.4 gold Troy ounces to buy one Bitcoin.

The 1987 crash was a computer driven crash, but Bitcoins have displayed no such sharp decline yet. Even if the Bitcoin prices crash like the 1987 crash, it does not mean that a bull market will kick in. In the long run Bitcoin prices could flat line and never recover. It is also interesting to note that the COT report shows no sign of the non-commercials playing the Bitcoin game. The Speculators are doing all the Bitcoin futures speculation. They are only net short Bitcoin by a ratio of 1.35:1, which is nothing in the big scope of things.  Even with the speculators I would like to see more of an extreme ratio, which could be a potential bear trap.

All the Cryptos capitalization is only about 329 billion today, which is also just a very small part of the market. Let’s put it this way, “any super Bitcoin crash will not take the general stock markets down, even though the Nasdaq could implode for different reasons.

I may only update Bitcoin charts once a week either on Sundays or early Mondays, as it is not at the top of my priority list.

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Bitcoin Rally Review: $12,000 Or Bust?

 

Looking for a different perspective, I decided to use the line type settings. With line type settings most of the erroneous spikes disappear or smooth out, and no gaps will show up. Switching between bars and line settings can also change any wave count.

The first thing I saw was that it can work as a diagonal decline. If the crash to that $6000 bottom is a “C” wave, completing wave 3 in Minor degree, then this Bitcoin bear market is not finished yet.  The problem is, where in this 4th wave rally are we?

I don’t have the magic location, but I love the challenge of counting out a set of 5 waves  that may be impulse related. Besides that, this market decline is good practice because we will get the same puzzle again, once the general markets hit their market lows. The only difference will be that the last part of the DJIA decline will be a 4th wave in Intermediate degree, followed by 5 waves in Minor degree.

Over all volumes in Bitcoin trading has been dramatically curtailed, which tells me Bitcoins as an investment is fading fast.

Over 1541 Cryptos are presently posted, with a total capitalization of about $445 billion, US dollars. Since its hay days of 2017, about $275  billion US dollars have gone up in digital smoke, and I’m sure that smoke will keep on coming.

Sheila Bair says bitcoin has no intrinsic value — but neither does the dollar – MarketWatch

This describes my sentiments exactly as most Bitcoin investors don’t even know what “intrinsic” value is.

I like 4th waves, but they can be pretty tough to decipher. I consider 4th waves (up or down) to be the most important wave. Keeping my degree levels low still makes sense, because you will “never” see,  5 waves down in Primary degree on a 90 minute, intraday chart. Even 5 waves down in Intermediate degree may never show up!

The Gold/Bitcoin ratio is at 8.47:1, and has only come close to this 3 times in the last year. A double or triple top in the Gold/Bitcoin ratio does not bode well for the price of Bitcoins. The Gold/Bitcoin ratio may not have any forecasting value for Bitcoins, but I’m sure this ratio will shrink much more.  A shrinking or compressing ratio means that you need fewer gold ounces to buy one Bitcoin.

If the rally that has completed was a 4th wave rally, then Bitcoins will crash below $6000. Of course, if we are in a triangle that would drag the time out some more.

I’m very bearish on Bitcoins, and hanging on to them when they can crash $4000 makes no sense to me.  Even after all this starts to play out, then Bitcoins price could flat line, just like Tulips did in 1637!

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Bitcoin Bear Market And Robberies Continue!

 

Japan Gets Tougher On All Crypto Exchanges After Coincheck Hack

Masked Gunmen Steal ‘Fortune’ in Bitcoin in UK Robbery – Bitcoinist.com

Coincheck Confirms Crypto Hack Loss Larger than Mt Gox – CoinDesk

Bitcoin – Millennials Fake Gold | Vitaliy Katsenelson Contrarian Edge

 

The news about Bitcoin has not been kind as the real state of Crypto coins revels itself.  All these new Bitcoin billionaires are painting a bulls eye on their faces when they openly brag about their wealth they think they have. Bitcoin has been going sideways, and it still can swing in both directions before it decides on a new trend, or to finish an old trend.

Either way it doesn’t look like Bitcoin is going to go “Vertical” any time soon due to the fact that major groups are stealing Bitcoins by hacking, or now home invasions. From my perspective, this Crypto market is the Wild West, where there is no town marshal. Nobody is responsible for what they do so 100’s of millions USD valued Bitcoins have already gone missing, and many more will still disappear.

I visited my bullion dealer who was very open about the fact that gold owners were coming in and dumping their gold holdings to buy Bitcoins. Dumping gold to buy Bitcoins is like chasing Fool’s Gold thinking its real gold.

There are many fake physical Bitcoins being stamped and sold on the open market as my bullion dealer showed me one. I had to have one, so I ordered 6 fake Bitcoin rounds online, which I will use to see the reactions on peoples faces. These fake Bitcoins have a 99.999% pure gold plating on it and I will find someone to get it tested once I take physical possession of the Bitcoins.

This may not happen for several more weeks, but my gut feeling is that I should have ordered twice as many.  I think people love them as novelty items and I want to show them to people before I think about ordering more. My landed cost for a single fake Bitcoin will be about $4 CAD.

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Bitcoin Futures Intraday Update:

In my last post I showed an Intermediate degree “W” wave. Well, We could be in another one.   The one main problem I have with counting it as a zigzag pattern is that the A5 and B5 waves are very close to being the same angle.  Real zigzags are far more violent and contain far more diagonals wave structures as well, so for now I will bury the idea of a zigzag.

I believe we could be starting another new set of 5 waves down in Intermediate degree, but he only way that can even start to get confirmed is when a new Bitcoin low is reached. In other words Bitcoin patterns have to act the part of an impulse.

Markets have a nasty habit of trashing wave counts and opinions, so when this impending wave count goes off the rails, then most of the wave count has to be instantly trashed. The worst thing we can do is carry garbage wave counts with us into the future. The wave patterns should take a little longer to play out, so we have to have a bit more patience as this bear market starts to get serious.

There are now 1491 Cryptos competing to take money from gullible investors, with the total capitalization back up at about 565 billion US dollars.  These numbers shift dramatically and can swing, many billions in just hours. The Gold/Bitcoin ratio is still  compressed at 8.5:1 and based on that ratio Bitcoins are extremely cheap. Don’t trust this for Bitcoin use, as we could be facing a new decline, but I will still post the Gold/Bitcoin ratio when I can.

They also have a COT report on Bitcoin futures traders positions, and so far not a single commercial trader has taken a single position in any short or long positions.

This speaks volumes as they show no interest in taking any side. The only traders playing with these futures contracts are the speculators which are net short now as they were in the beginning. Even their numbers will not be any help if Bitcoin prices start to flat line.

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Cryptocurrency Bloodbath Update.

Bitcoin bloodbath highlights these defensive cryptocurrency strategies – MarketWatch

During the night the Crypto coins continued with their decline, which some are calling a,  “Bloodbath”.  Maybe it’s just an old fashioned Meltdown and Specter issue!   🙄  They will use all sorts of  fundamental logic reasoning to explain the Crypto meltdown, but in the end it has nothing to do with logic, but has everything to do with our human emotions.

Some say they are still hoarding Bitcoins but would you hang onto Bitcoins if it were to crash to below $5000? The cost of mining a single Bitcoin is around $3300, so Bitcoin can always crash back down to the cost of mining.

On about the 12th of January the entire Crypto ICO capitalization peaked very close to $736+ Billion. Since then over $300 billion of US dollar capitalization has disappeared into thin air. Bitcoins were created out of thin air, and they are now evaporating right back to where they came from. Is this $300 billion, in the lost and found? Nope, no such luck as Cryptocurrencies capitalization goes up in a puff of electronic smoke.

This market is changing very fast and I think more downside is still to come. The last thing I would trust is any wave count, as all this could be just a one hit wonder. After all, did the price of Tulip bulbs keep going higher and higher with the Elliott Wave pattern?

Not only are US dollar values evaporating back into thin air, the Gold/Bitcoin ratio has “dramatically” shifted in the last month or so. This puts Bitcoins close to the extreme cheap side in the Gold/Bitcoin ratio. Even the Gold/Bitcoin ratio should not be trusted at any extreme.

The investors that went into debt to invest in Bitcoins are going to get hit the hardest as they doubled their leveraged. With all this US dollar value disappearing into thin air, it could bring down the financial system as well.  When the markets really start to implode, they could shed $30-$40 trillion by the time the dust settles.

Besides capital values disappearing into thin air the ICO’s on my list should also start to shrink from the peak of 1450.

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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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CME Launches Bitcoin Futures Contracts

 

Cryptocurrency and futures speculation is very risky due to the extreme leverage that many futures contract have. The opinions expressed are strictly personal and are not to be considered as any “Buy” or “Sell” recommendations.  Any Elliott Wave positions I show are strictly a best guess, as it could take many years before any real wave pattern could emerge. At this time I know very little about the specs on these contracts, but they contain 5 Bitcoins per contract.

When Bitcoin futures spiked to $20,000, the contract had a $100,000 US dollar value.  For every $1 that one Bitcoin moves up or down, the futures contract jumps up or down by $5. There are stiff margin requirements, especially  when shorting. The good news is that it’s all based on cash settlement prices, which has no underlying impact on Bitcoin prices.  I have no idea how much leverage that they use just yet, but a general reference point would be 5:1 or the price of one Bitcoin.

I will not make Bitcoin commentary a big thing as there are still huge problems with most Cryptocurrencies. The chart below is a bit longer than 5 days old, so any degree levels I do have are very small.

 

As we can see, the volumes have been extremely low with a huge surge going 300 in a matter of minutes. What we did get tonight is another huge spike to the upside, leaving a huge gap in its wake. Due to the low volume overall, we could get many more gaps open up everywhere. Until this fills out more all gaps will mean little in the big scope of things.  The SP500 also spiked along with Bitcoin futures, but that also can be brushed off as a coincidental event.

When I calculated the Gold/Bitcoin Futures ratio, it worked out to about 15.4. It took 15.4 gold ounces to buy one Bitcoin. Only once have I recorded anything higher. Still,  we really don’t know where the Gold/Bitcoin ratio can max out at, so we really don’t know if it is in a price bubble even at $20,000

There are currently 1361 Crypto currencies out as of today, but I would expect for the amount of Cryptos to keep growing in the near future.

All Cryptocurrencies | CoinMarketCap

When they stop flooding the markets with Crypto ICOs, then we may get close to our first washout stage.

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