BTC WEEKLY CHART: "The Panic Zone" The China Yuan Devaluation
This 8 week arm of the 1.5 year BTC rally is about to subside. First a little history. The Chinese investors (not the government) are in control of BTC value. The Chinese banksters are actively devaluing the Yuan. This is round two of major devaluation moves and it is nearing completion. As it completes the Chinese investors will start taking down their profit converting BTC back into Yuan.
The evidence: On the BTCCNY chart the volume in this rally was through the roof. This has tailed off while price continues to climb. This last push is by uniformed stragglers and the informed are about to eat their lunch. On the BTCUSD chart, the volume of this devaluation rally was almost non-existent. The US investors are either completely demoralized or distracted or both. I'm sure the Bitfinex hack pushed many US investors out of the market. Nevertheless, the real indicator to look at is the oscillator Stoch shown in the graph above. It is screaming TOP TOP TOP as what little USD volume there was has tailed off to nothing.
The Technicals: I drew a long term resistance level months and months ago based on Fibonacci wedge analysis. This is represented by the blue hash line. The price has reached this resistance. So how do I know the resistance is real? I don't. It's an educated guess. If I am right, this rally will correct back to the red hash rally trend line. This can either be a slow bleed (likely) or a quick retraction (unlikely). My call a couple months ago for $750 by February is still in play. While a penetration into resistance can still happen, the weak volume in the USD market and the dropping volume in the CNY market are strong indicators that a penetration, if it happens, will be short lived. This picture could change in February. From here on out, the total market quantity of BTC will flatten out as minors start to go off-line and transition into full time transfer agent servicing. This will be the foundation for further growth in the value of a BTC. Right now the USD is strong. Trump may succeed with his mandate and change is in the wind but the long term problems of the unfunded liability of the US federal government are YUGER. The federal reserve cannot raise interest rates without destroying the federal government budget. To continue fundingg deficit spending, more dollars must be created. The more dollars that exist, the less they will buy. This is called inflation. Hyperinflation is showing up in a few places, real estate, health care costs, and higher education costs, and it will expand to other areas. In the long term USD strength is a short term delusion.
The evidence: On the BTCCNY chart the volume in this rally was through the roof. This has tailed off while price continues to climb. This last push is by uniformed stragglers and the informed are about to eat their lunch. On the BTCUSD chart, the volume of this devaluation rally was almost non-existent. The US investors are either completely demoralized or distracted or both. I'm sure the Bitfinex hack pushed many US investors out of the market. Nevertheless, the real indicator to look at is the oscillator Stoch shown in the graph above. It is screaming TOP TOP TOP as what little USD volume there was has tailed off to nothing.
The Technicals: I drew a long term resistance level months and months ago based on Fibonacci wedge analysis. This is represented by the blue hash line. The price has reached this resistance. So how do I know the resistance is real? I don't. It's an educated guess. If I am right, this rally will correct back to the red hash rally trend line. This can either be a slow bleed (likely) or a quick retraction (unlikely). My call a couple months ago for $750 by February is still in play. While a penetration into resistance can still happen, the weak volume in the USD market and the dropping volume in the CNY market are strong indicators that a penetration, if it happens, will be short lived. This picture could change in February. From here on out, the total market quantity of BTC will flatten out as minors start to go off-line and transition into full time transfer agent servicing. This will be the foundation for further growth in the value of a BTC. Right now the USD is strong. Trump may succeed with his mandate and change is in the wind but the long term problems of the unfunded liability of the US federal government are YUGER. The federal reserve cannot raise interest rates without destroying the federal government budget. To continue fundingg deficit spending, more dollars must be created. The more dollars that exist, the less they will buy. This is called inflation. Hyperinflation is showing up in a few places, real estate, health care costs, and higher education costs, and it will expand to other areas. In the long term USD strength is a short term delusion.
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