This has to be the ugliest chart I've seen in a very very long time. Where to begin...
The top was put in when the US SEC ruled against allowing the Winklevoss twins to create a BTC backed ETF. They had spent the last 2 months accumulating asset to back the ETF and then dumped it all at once when it was obvious they should put their money somewhere else. That broke the steep solid red trend line I am calling the W.Voss trend.
Price has dropped down to support at the second red dot trend I am calling the Chinese Insider trend. Price bounced off the trend and now all the helium has come out of the balloon and price has dropped back down creating a giant $120 sized "Dead Cat Candle". A DCC is a harbinger of doom to the Chinese Insider rally. The fundamental here is that the PBoC , China's SEC, has shackled mainland based BTC exchanges creating all sorts of problems for the Chinese investor to divest. On top of that, OKcoin is teetering on extinction. I would bet my valuable wooden nickle collection that the dotted red trend is kaputski.
That leaves the 2 year rally as the only real long term support on the chart down around $850. So here's the real warning to y'all. The counter trend indicators are screaming SELL SELL SELL. The volume has been dropping for nearly 2 years. MACD is about to crossover to the dark side at its highest crossover point since the blow off top in early 2014. The Stochastic oscillator is showing that the current decline still has room to drop. It loosely predicts a decline to the feared PANIC ZONE. That implies a 2 year trend break and then a precipitous drop.
Fundamentals: Bitfinex issued an announcement about a grand fork in the BTC hash chain. They and about 12 other exchanges differ with the major miners about how to proceed. Bitfinex leads the market in hedging their bets allowing speculation on the future of each fork. In the mean time investors are bailing into other cryptos. Etherium has taken off, up 300% or more along with several other winners. Not all the cryptos are winners. Litecoin continues to lose value. All of this indecision along with the government thugs have cast a huge dark cloud over all of us.
Does this deter me? Not one bit. I'm looking to snatch up some cheap coin. I'm gonna wave my cowboy hat and ride this hydrogen bomb all the way to ground zero. YeeeeeHaaaaahhh.
Have you noticed the anomaly in BTC value on Bitfinex relative to all other exchanges? Many have compared this to Mt. Gox before it died. This situation is different. It is not being caused by an inability of the exchange to meet its obligations. It is due to a war on Bitcoin being waged by the US federal government through its puppet bank, Wells Fargo, in collusion with the Chinese and the PBoC. The Chinese side of the war is noted on my chart and Chinese exchanges are still barred from exchanging bitcoin to fiat currency and started months before the US side. There is a correlation between the date of Xi's visit with Trump at Mar-a-lago and the start of the US side of the war. The cause of price anomaly is investors wishing to cash out to fiat have to buy bitcoin to move it out of the exchange. This additional and unnatural buying pressure is also creating a bitcoin shortage on the exchange causing the price to artificially rise relative to the external value of bitcoin. This situation will end in two ways. Bitfinex may come up with a solution and/or when investors figure out alternative methods of transfer. In the meantime arbitration traders dealing in pure crypto are making a fortune on the differential. I don't think the situation is long term fatal. The market will normalize back to equilibrium. In the long run it will be fiat currency failure that will end the war abruptly. There are an exceptional number of bubbles threatening fiat. Any or all can burst at any time and bring down large institutions. To enumerate some of the bubbles, student load debt defaults, auto load defaults, war sucking up money. Have you considered how much the cruise missile strike on Syria cost? Was it worth the money?
investigator
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This counter trend rally leg of the Chinese Insider Trend (Red Dot Line) is about over. The Chinese exchanges are still under lock and key by the PBoC. No withdrawals are allowed. So what's a Chinese trader to do? Trade! May as well. There will be a mad rush to the exits when the lock comes off the door. This double top pattern strikingly resembles the October 2014 top pattern. My downside targets remain unchanged.
investigator
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A golden swan has landed. Bitfinex has officially taken 100% responsibility for the hack a year ago and will be refunding all of the monies it stole from account holders to plug the hole. In their statement they sound very gracious that they are still alive. From my perspective, they did not adequately reimburse the forced creditors. The forced creditors are still owed a compensatory interest on the seizure. No mention was made to compensate for lost time and lost use of funds. In that period the price of Bitcoin more than doubled while the BFX tokens languished in fractional value. I'm still miffed at the Bitfinex for what they allowed to happen and then the follow-up action to thieve from the unaffected parties, "...to make things fair." I'm grateful to get my money back. Quite frankly, I'm surprised to get my money back. And regretfully, Bitfinex will be forever tarnished for their actions. REALLY SHOW YOUR GRATITUDE BITFINEX - compensate us for time lost.
Interesting to note is that there are no traders quoted saying that they anticipate a huge upside. I read a consensus of large downside risk with very little upside potential with a very large black swan about to touch ground.
investigator
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The Chinese Insider Trend (Red Dot Line) has held for now and that Dead Cat Candle has turned into a giant Doji. Doji's indicate trend change and in this case it means down to up. This may be a brief relief rally and should be treated with extreme caution. With the dollar value topping action, I believe the China government is not compelled to continue devaluing the Yuan. No Yuan devaluation = no Chinese Insiders = No BTC rally. In my mind this support is short lived.