02/02/2019/09:00CET

The last 2 weeks have seen a slow grind lower with BTC. So what is in store for the big daddy of the crypto world?

I have been off the etherwaves over the last few weeks attending to other things in my life and taking a break from the constant connected frenzy our lives have become. I am now more and more certain that our cultural and biological relationship with technology has swung past the zenith and we are now slowly succumbing to the myriad of tiny signs that we are over-saturation with data.

Enough of the social psychoanalysis!

BTC and where is it going?

BTCUSD daily chart from Bitstamp

• at the moment we trade at 3434usd after falling from highs of 3750 in the last 3 weeks
• I have highlighted a channel of action which stretches back to just after mid dec 2018. We are locked into this channel and currently trade in the lower half of it.
• In fact most of the last 3 weeks has been in the lower half of this channel.
• that middle line of the channel also happens to be where we find the 21dema and the 50 sma indicators.
• I have marked the low of 3127 which we touched on dec 15, 2018
• I think that probabilites lean toward us retesting this level in the next 4 weeks
• But I also think that a bounce up to retest the upper resistance line of this channel is also more likely than not within this time frame. This line is descending so the more delay we have till this bounce, the lower it is likely to be.
• Any breakout that breaches the upper boundary of this channel will most likely falter at the 4100 resistance level that has stopped BTC twice before recently
• The trend short term is down. We need to break this channel and stay out of it to start to talk about a reversal of trend.
• The next big test for BTC and #cryptos in general is the 3100usd line.

Why is 3100 important?

• Zooming out to inspect what prices did when they first reached this level we see an interesting and potent signal

BTCUSD weekly bitstamp

• Back in mid 2017, this 3100 mark signified a serious top and a pull back. (red circle)
• When we reached this level again there was resistance but then we punched through it (you need to look at the daily back then to see the resistance)
• Then back in early sept 2017 we had a hard run to the big round of 5000usd. Then we got a spooky pullback of over 35% Where did it end? You guessed it, we bounced at the 3100 mark. (red circle)

So 3100 is a level to watch.

• We may overshoot on the way down, but if we get stuck below this level, then we have broken a major piece of this market structure. This would have major psychological effects on the overall crypto market, not to mention spelling doom for cryptos that are scratching the bottom of the barrel of their funds post ICO. We don't need to discuss the gravity of this.
• But we must also expose the optimistic side of the argument: A bounce of 3100 has a strong opportunity to be the bottom in this bear market we have all been waiting for. We the last standing soldiers who still give a shit and are probably still hanging on with skin in the game. It will be a slow grind, but having retraced almost 85% from the peak would be a healthy compressed base to set of the next upward leg.

We have to keep in mind the fundamentals. They are what keep us positive. They are what lead us to believe that the negative sentiment in the market right now is as shallow and fragile as the positive was when we were in the, thin air, tippy tops in dec 2017, North of 19k.

• There has been amazing work done behind the scenes in BTC with scaling and with second layer features. These were either theoretical or not even thought of back in 2017.
• There is a solid core of alts that have their noses to the grind stone and are forging into their chosen markets and disrupting. They may be running on the smell of oily rags, but if they can hang on just a little longer, the future looks exceptionally bright for them.
• The traditional markets have balked. The Fed in the US has paused monetary policy normalisation. This means the economy is nowhere near as strong as most permabulls think. Much is in the balance for the traditional markets in the weeks ahead.
• The wealthy will not let another bull run in cryptos run off without them on board. There is a steady stream of background news coming out of them wading into the crypto pond trying as hard as they can not to cause too many ripples. I believe at some point they will be jumping in with both feet when the hard floor under the traditional markets turns to paper.

BTC maximalist argument

I am not a #bitcoin maximalist but there are some points to be made about this argument

• Bitcoin stands apart as the coin with the immaculate conception. Almost no other coin can boast this heritage.
• Reputation for bitcoin devs is all they need to keep working. As opposed to payrolls that keep other coins moving forward, and equally exposes them to the fickles of the market.
• Bitcoin is still the most widely known cryptocurrency with most 'people on the street' only knowing this brand. How often I am reminded of this when the subject of crypto comes up with new people in my life.
• BTC will never die - there will always be miners out there, even if it were to dry up to only a few. Someone will mine. I interpret this as BTC will never go to zero. This fact will percolate through the general population in time and build solid floors to the value of BTC.
• Crypto's success will roughly be inverse to the success of the current financial structures. The laters structures have reached their peak and they are faltering all around us. It is a fall that is hard to perceive unless you look for the signs, but that is failure of human nature.
• MMT (Modern monetary theory) is showing its shortfall. The argument that it was instrumental in propelling the human race so far and so fast (the last century) but money based on debt contains some inherent flaws which are irreconcilable. These flaws are bubbling to the surface all around us.
• And finally - the ultimate social rule "Mankind only know how to move in a heard!" By the time the masses realise a major realignment is underway, it will already be well under way.

As always guys, leave comments, have fun and trade safe.

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Disclaimer: This post is not financial advice. Before investing any funds do your own research and make your own decisions. Cryptocurrencies are highly speculative.
And finally: Do not invest money you are not comfortable losing.

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