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Weekly Bitcoin Price Prediction Analysis – Feb 5, 2019

DisclaimerThe ideas presented in this article should not be taken for investment advice, and are simply the views and opinions of the authors. 

This is the fourth weekly collaboration between Eric Crown & Mango Research. Eric is, by far, one of the few technical traders in the space that really knows what he’s doing. He has over 10 years of experience trading traditional markets and market-making for equities. 
What we like about Eric the most is that he doesn’t simply trade technicals – he trades the crowd psychology & behaviour derived from the technicals. We’re excited about this collaboration and will hope you enjoy & learn as much as I have from Eric.

Quick Overview

Bitcoin appears to be printing a bear-flag as it continues inching toward the $3250 mark that we forecasted a few weeks ago. More importantly, for the first time in the history of Bitcoin, the monthly candle opened below the 55EMA. The response from the bulls have been weak thus far.

The descending volume further indicates that buyers aren’t willing to step in just yet. Since price action appears to be in a slow, declining consolidation, all bearish indicators discussed in our last couple of reports are still very much in play.

The report also discusses the 4 Day Death Cross and the the Volatility Index as pointed out by the Eric Crown.

Note: Our bias/opinion is always on the side of the trend – and the trend is still Bearish!
However, technical analysis on current price action proposes a case for both – Bulls & Bears

10 SMA - A Daily Harasser

BTC started the weekend strong with a rally up to the $3485 area. The move was cut short, however, as it was met with stern resistance from the daily 10 Simple Moving Average. As expected, the price quickly retreated back to the $3380 region. This has been the story for the past few weekends now: Bitcoin rallies & hopes run high, Bitcoin is met with a key daily EMA, Bitcoin retreats & hopes are crushed.  This is a classic sign of bearish consolidation & distribution.

As Eric Krown has stated: 

“Bitcoin is being walked down gradually toward the $3250 mark”

BTC Price Prediction & Analysis Feb 2019

BTC/USD – Rejection of daily 10 MA

The rejection of the daily 10 Simple Moving Average was key. The 10 SMA has been holding down price action for over two weeks now. This indicates that the sellers are in firm control.

Break Of The Monthly 55EMA – History was made!

In our last report we discussed the grim possibility of Bitcoin closing a monthly candle under the 55 EMA. Well, that possibility has now turned into a reality. This does not bode well for Bitcoin bulls.  The monthly 55EMA has proved as strong support for the preceding 3 months. We saw price get rejected every single time until its break last week. 

To reiterate –  February started the month with Bitcoin opening under the 55 EMA – with January closing under the 55 EMA.  This clear open & close under the monthly 55 EMA is a first in Bitcoin’s history. Bears have pushed price into new territory. And buyers are seeming more hesitant than ever.

It must be noted, however, that Bitcoin is relatively young. It hasn’t had enough market cycles to test the 55 EMA before. This lack of price history should be taken into consideration before placing weight on this forecast.

BTC Price Prediction & Analysis Feb 2019

BTC/USD February Candle Opens Below Monthly 55EMA

A retest of the  55 EMA in the month of February should not be discounted either. The 55 EMA currently sits at the $3674. A retest and rejection of this region will further strengthen our bearish bias.

Major moves are what gives us a  broader perspective on overall market sentiment and expectations. However, it's the minor/intermediate moves that will help us make informed technical forecasts. And so far we have 3 moves still in play suggesting incoming support.

Inching toward the $3250 Mark

In the last few reports we emphasized that multiple signs point to the $3250 mark. As of now,  nothing has changed. There has been far too much confluence to suggest otherwise, namely:

  1. The Symmetrical Triangle

  2. Double-Top Murder Formation

  3. Weekly 200 SMA

We’ve discussed the symmetrical triangle and the double-top formation in greater length in the previous reports. As long as we respect the $3750 region – both of those patterns are still in play. And both of them have a measured move to the $3250 mark.

For now, however, our most immediate (or closer) concern is the 200 MA which is drawing the perimeter for the $3250 target.

Weekly 200 MA

The 200 MA that proved as major support back in December at $3100-$3200 region as well – confluencing with both measured moves. The first bounce off the 200MA back marked BTC’s local bottom on the weekly chart, confirming it as key support. 

This 200 Weekly is a major EMA that has a lot of eyes on it. And the more eyes you have on a support/resistance line, the stronger it is likely to be. Bitcoin has been ranging between this 200 SMA and the 200 EMA. A break of either one of these will likely lead to a bigger move.

BTC/USD Weekly 200 MA Support at $3298

We’ve tested the 200 EMA a couple of times already – and it’s proven itself as strong resistance. As we inch toward it gradually, we are leaning stronger and stronger toward this breaking.

Note: The 200MA has creeped up since the last test in December where it was sitting at $3100 level. As things stand, the 200MA is currently sitting at $3298.5 (Bitstamp).

However, it is extremely important that we wait for a confirmation before making any major trade decision. As Krown has stated himself:

“There’s more pressure to the downside than not – however, I’m going to wait for a daily break of the $3250 or the weekly close under the 200 Simple Moving Average”

Volatility Incoming?

BTC has been consolidating between the weekly 200 EMA and 200 MA for over 2 months now. This consolidation has brought btc to a state of decreasing volatility. 

Krown observed that low volatility was frequently followed with a sudden price move leading to high volatility. While this may not be a definite play, it is a highly probable one based on historical data.

Question is, are we expecting a price move to the upside, or the downside? Well, given recent price action, there’s a stronger bear case than a bull case.

4 Day Death-Cross

The last 4-day candle close marked a fresh 55-200 EMA death-cross. A death cross suggests a potential major sell-off incoming. This is the second 4-day death-cross in BTCs chart history. The death cross may be a reliable indicator in forecasting a major sell-off in traditional and crypto markets.

BTC Price Prediction & Analysis Feb 2019

BTC/USD 4 Day Death-Cross

However, it may be prudent to further strengthen a bearish analysis with another suggestive bearish indicator. Death-crosses make for good BTC price forecasts on lower time-frames. However, this may not hold true for higher time-frames given BTC lack of price history.

Ethereum: Resolution On The Measured Move

Last week we left off with Ethereum getting rejected at the Head & Shoulder (top) neckline. only to form a bearish descending triangle. Ethereum soon after made an announcement of postponing their much anticipated Constantinople hard-fork. Although Ethereum was already forming a bearish pattern, the announcement only helped fuel bearish sentiment. 

This resulted in the break of the descending triangle on January 27th. The break-down of the descending triangle had a forecasted measured move of $99 (approx.

Break down of Ethereum's descending triangle with a forecasted measured move at $99

As Ethereum’s price action unfolded after the release of our last report, the forecasted measured move was indeed hit – albeit with a slight front-run. Ethereum wicked its way down to $100.9 and closed at $102.92.

Ethereum's Descending Triangle Reaction

For now, Ethereum is acting much like Bitcoin:  bearish consolidation. Price action looks to be limping along and we are expecting a resolution on this consolidation very soon as well.

Weekly Bitcoin Price Prediction: Summary

Overall – our sentiment leans strongly to the down side. As mentioned, Bitcoin is currently in a bearish consolidation and Ethereum is following suite. All signs point to at least $3250, but the question remains as to whether or not we make a nose-dive right past it.  

Price seems to be inching closer and closer toward the 200 SMA on the weekly (currently at $3300) as volatility pressure builds up. Multiple indicators point toward an explosive move. Will the explosive move be a break? Or a bounce? A break points toward lows of $2400 - $2600.  A bounce may take us all the way back up to the $3800 region. However, as indicative in this report – we lean to the downside. 

We’ll have a more concrete opinion as price action develops. So stay tuned for the next report!

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Weekly Bitcoin & Ethereum Price Prediction & Analysis

DisclaimerThe ideas presented in this article should not be taken for investment advice, and are simply the views and opinions of the authors. 

This is the third weekly collaboration between Eric Crown & Mango Research. Eric is, by far, one of the few technical traders in the space that really knows what he’s doing. He has over 10 years of experience trading traditional markets and market-making for equities. 
What we like about Eric the most is that he doesn’t simply trade technicals – he trades the crowd psychology & behaviour derived from the technicals. We’re excited about this collaboration and will hope you enjoy & learn as much as I have from Eric.

Quick Overview

A lethargic week of price action culminated with a rollercoaster weekend with an explosive break to the downside. Forecasts from the previous reports are playing out well.  Overall trend still remains bearish. Multiple signs point to a revisit of the weekly 200MA. In fact, price appears to be dropping even as we conclude this report.

While we do believe that Bitcoin will eventually make new lows, we believe that we are likely to encounter strong support at the $3.2k region. Although, the break of the monthly 55EMA leads us to believe that BTC may break the $3.2K level on its current drive down.

Bloody Monday! And Rejected EMAs!

Another roller coaster weekend. But this time, we followed up with a Bloody Monday.

The entirety of the week comprised of “wicks” shooting to either side of the narrow trading range. This is a clear indication of “liquidity hunts”. Institutional money looking to distribute (and/or accumulate) in target price-areas where retail investors are likely to place their orders. Once they tap into that liquidity, the price promptly returns to the range. We witnessed that all week and cautioned against trading the lower time frames.

If price action in the past week frustrated traders, the weekend was just as bad . Bitcoin bursted out of its trading range early in the day and shot up to $3660 to test the 21 EMA.  Once again, sellers promptly stepped in and the move was sold into. Krown managed to catch the move live on video this Saturday. He was quick to place a short himself  – a rather exciting video after week of lethargic price action!

BTC/USD – Rejection of daily 21 EMA at $3650

The following events contributed to Krown’s conviction in the short.

  1. Rejection of the daily 21 EMA

  2. Rejection of the daily 10 SMA

  3. Rejection of the weekly 10 SMA.

Furthermore, Bitcoin is still playing out the the larger symmetrical triangle that we’ve been discussing. Taking all of this into consideration, it’s no surprise that Monday started off with blood.

All signs still point to (at least) $3250

We’ve been saying it for almost a month now. All signs point to the $3250 area. Nothing has changed. There has been far too much confluence to suggest otherwise, namely:

  1. The Symmetrical Triangle

  2. Double-Top Murder Formation

  3. Weekly 200 SMA

The Symmetrical Triangle

As depicted in the previous reports, BTC was forming  a Symmetrical Triangle for weeks. It finally broke down at the $3850 region. While price action remains below that level, the measured move for this formation points to the $3250 region.

The Double Top

Then we had the Double-Top “M for Murder” formation on the 3-Day. The break of the neckline of this formation occurred at the $3700 region. It’s measured move pointed to the $3250 region as well. Considering this is a double-top formation on a higher time frame, we had a high degree of confidence in it playing out (and so far it is).

The 200 MA

Finally, we have the 200 MA that is sitting on the $3250 region as well – confluencing with both measured moves. The 200 MA is the mammoth of all MAs – especially on the weekly time frame. Almost all eyes are on this moving average. And the more eyes you have on a support/resistance line, the stronger it is likely to be. Bitcoin has been ranging between this 200 SMA and the 200 EMA. A break of either one of these will likely lead to a bigger move.

BTC/USD Weekly 200 MA Support at $3298

We’ve tested the 200 EMA a couple of times already – and it’s proven itself as strong resistance.  And now, it looks like Bitcoin wants to test the support at 200 SMA another time. Will it hold?

Note: The 200MA has creeped up since the last test in December where it was sitting at the $3100 level. As things stand, the 200MA is currently sitting at $3298 (Bitstamp).

Lows in? Nope – Not yet.

Price may very well bounce of the 200 SMA. However, we strongly believe that Bitcoin is eventually going to break through this level and make new lows. We typically like to see at least a few flags turn green to indicate a possible low. Some of these flags are:

  1. High Volume Buying
  2. Volatility Index
  3. NVT Signal

None of these signals are flashing on – which makes us lean to newer lows.  Our eyes are on some key levels of support:

  1. $2450  zone
  2. $1900 zone
  3. $1150 zone

Of course, these need to happen one at a time. When will this happen? Well, time-analysis can be tricky. These things can take time to play out. That being said there's a counterpoint that may indicate a more immediate break of the level: The Monthly 55 EMA.

55 EMA Monthly:  An S&R Flip?

As the month draws to a close, we are approaching a crucial decision point on the charts. Over the past month we’ve been keeping a close eye on the monthly 55 EMA. As mentioned in the previous reports – higher time frames tend to hold the strongest significance. Moving averages, patterns and horizontals have a higher degree of playing out on higher time frames.

Bitcoin has never closed under the Monthly 55 EMA in its history. That being said – we must emphasize that Bitcoin is still relatively new. It hasn’t had enough time (market cycles) to test its monthly 55 EMA with conviction. This market cycle, however, has given Bitcoin ample of time and opportunity – and it’s not looking good.

BTC/USD Monthly 55 EMA Support at $3674

55 EMA on the monthly has seemed to have turned from support to resistance. This is an extremely bearish sign. The monthly 55 EMA has successfully held as support on all prior monthly closes.  However, as we inch towards the end of this month of January, the monthly 55 EMA seems to have given way.  

Support has turned into resistance (S&R Flip) as January struggles to break past the 55 EMA sitting at $3670 level. This confluenced perfectly with the rejection of Bitcoin’s breakout this weekend

We still have three days left for Monthly candle close. But as things stand, it likely that we are going to close underneath the 55 EMA. An official close below the 55 EMA will make the larger picture look grim.

However, anything is possible in Bitcoin land. A dramatic move to the upside should not be discounted. A lot can happen in three days.

Ethereum: Leading The Market Up ...And Back Down!

Ethereum’s news driven rally back in December 2018 took the entire market up with it. However, we cautioned that it is very likely that it takes the entire market down with it as well. It seems that the market is playing out just as we predicted. This was highly anticipated since it is class event-driven market-behaviour:

  1. Event is announced
  2. Market rallies leading up to the event
  3. Market dumps closer to the event

Interestingly enough the event that was supposed to take place – never even happened. Constantinople was delayed and pushed back to the last week of February. Could we see the entire sequence of events repeat?  Afterall, the initial rally seemed to have been a carbon copy of the BCH fork rally. Let’s see how things pan out..

That being said, Ethereum was forming the perfect Head & Shoulders pattern. Erik Crown stated that it had all the right characteristics for the pattern:

  1. Correct shape
  2. Correct Volume characteristics
  3. Correct Price Action characteristics.
  4. Well defined neckline.

Ethereum's Head & Shoulders neckline rejection!

However, the formation began to show some hesitation & doubt when the right shoulder got extended far too much. It was followed up with a rejection of the neckline to the upside.

But the distributive price action morphed the formation into a smaller descending triangle  – which Eric discussed extensively on his daily streams. The measured move pointed to approx. $99. This seems to be playing out as we type this (Ethereum is currently sitting at $103.15)

Break down of Ethereum's descending triangle with a forecasted measured move at $99

Weekly Bitcoin Price Prediction: Summary

Overall trend remains bearish. Multiple signs point to a revisit of the weekly 200MA. In fact, price appears to be dropping even as we conclude this report. While we do believe that Bitcoin will eventually make new lows, we believe that we are likely to encounter strong support at the $3.2k region. Although, the break of the monthly 55EMA leads us to believe that BTC may break the $3.2K level on its current drive down.

Buckle Up! Its looking bumpy out there...

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Weekly Bitcoin Price Prediction & Analysis – January 2019

DisclaimerThe ideas presented in this article should not be taken for investment advice, and are simply the views and opinions of the authors. 

January 21st Bitcoin Ethereum Price Update 2019

This is the second weekly collaboration between Eric Crown & Mango Research. Eric is, by far, one of the few technical traders in the space that really knows what he’s doing. He has over 10 years of experience trading traditional markets and market-making for equities. 
What we like about Eric the most is that he doesn’t simply trade technicals – he trades the crowd psychology & behaviour derived from the technicals. We’re excited about this collaboration and will hope you enjoy & learn as much as I have from Eric.

Quick Summary

Our overall bearish bias remains intact. The weekend displayed a glimmer of hope with Bitcoin rallying to nearly $3800. But the quick sell off that ensued only served to strengthen the bearish case. The sell off lined up perfectly with a retest & rejection of both: the daily 21 EMA & 3-Day M-formation neckline.

Furthermore, this also confluences with the breakdown of the larger symmetrical triangle on Bitcoin. All signs point toward a retest of the $3250 area.  But will that be the bottom? We discuss our opinions on this matter and the rest in this report.

Weekend Roller Coaster – Key Rejection of 21 EMA

It’s been a roller coaster of a weekend. Bitcoin price witnessed a sudden $200 move in both directions within a matter of hours.

Saturday started strong with Bitcoin making a quick move from the $3600 to $3775 – almost a $200 move to the upside. Could we have foreseen this move? Perhaps.

Bitcoin formed a smaller Symmetrical Triangle over the week. Eric Crown has emphasised that symmetrical triangles have an equal opportunity to break to either side.  However, in a overall bearish trend – we tend to lean toward the downside.

“ Symmetrical Triangles have an equal opportunity to play out to either side
Eric Krown

Surprisingly, Saturday saw Bitcoin break the smaller Symmetrical Triangle to the upside. The breakout hit the measured move perfectly. Although Eric himself leaned to the downside, he demonstrated his professional skills by responding to market action and trading the breakout perfectly.

Rollercoaster action: Upward break of the triangle and promptly sold into..

The break to the upside had many people feeling bullish about the markets once again. But the anticipated follow up simply failed to arrive.

Instead, sellers stepped in promptly and sold heavily into the $3775 level. The price quickly retreated to $3700 which resulted in a successful rejection of the daily 21EMA break. And this was key! (we’ll discuss why in the next sections)

BTC Price prediction January 2019

Rejection of the 21-Ema on the daily.

Sunday showed a powerful response to the rejection of the 21 EMA. With rejuvenated confidence sellers were able to push the price of Bitcoin all the way down to $3500. A $200 move to the downside this time.

Interestingly enough, the rejected 21 EMA lined up with $3700. The $3700 was also the neckline for the  3-Day M-For-Murder formation (double top) that we also discussed in the previous post.

Incoming Murder? M-Formation Retest

As Krown would say: “M” stands for Murder!”. If you’re forming an M-like formation, you don’t want to break that neckline. And Bitcoin did just that when it closed a three-day candle under $3695. This neckline break has a high degree of playing out to the downside – especially on the higher time frames.

However, these formations may occasionally show a false breakout to trap people. A re-test of the neckline isn’t uncommon. But a rejection of the retest adds further probability of it playing out.

Notice the weekend rejection of the 21-EMA lined up beautifully with this neckline (as displayed in the image below).  This is very likely to increase seller confidence, as they begin to target the measured move for this break.

“ Rejection of the neckline retest on the 3 Day

Bitcoin 3 Day Price Analysis - January 2019

Double top (M-formation) break and retest of the neckline.

The measured move for this is typically the length between the neck and the top. This points to a move downward to around $3200 level area.  

And this is where things get even more interesting. We’re already seeing confluence with the Daily 21 EMA rejection and the 3-Day M-Formation rejection. These also line up perfectly with Bitcoin’s Symmetrical Triangle formation and the 200 Simple Moving Average.

Confluence Galore.. Bitcoin's Symmetrical Triangle

BTC toiled away on a larger symmetrical triangle for around 2 weeks. We first discussed this in our previous post. The projected measured move on the triangle pointed us down to the $3200 level.

The triangle broke down on January 10th – with volume confirmation. What do we mean by volume confirmation? Simply that there was high enough volume on that break down, to justify our conviction in the break. Essentially, a lot of sellers stepped in for that move.

“ As long price lives below $3850, the symmetrical triangle is still in play
Eric Krown

Break of the symmatrical triangle – pointing to $3250 range

The 200 MA's

The 200 Moving Average is typically a strong level that draws in a lot of attention.  It gets even stronger on the higher time-frames such as the weekly chart. Currently, BTC has been ranging between the weekly 200 Simple Moving Average and the 200 Exponential Moving average.

After breaking the 200 Exponential on its first pass, Bitcoin went on to test the  200 Simple Moving Average which proved as strong support. Bitcoin then went on to test the 200 Exponential a few times and was rejected each time. This leads us to believe that a test of the 200 Simple Moving average is imminent.

Weekly 200 SMA (red) proving strong support. And 200 EMA (purple) proving resistance.

The 200 Simple Moving Average is currently sitting at the  $3250 range which has perfect confluence with:

  1. M-formation breakdown
  2. Symmetrical Triangle breakdown

Both of the patterns above have a measured move to the $3250 range as well. The big question now, however, is: 

“ Is $3250 the low of the market?

Many seem to believe that we have seen the lows. However, we strongly believe that the lows are not in just yet.

Volume....Where Art Thou?

Unlike most other cryptocurrencies, BTC has ample price cycle history to draw some clues from. One of the clues left behind is the Volume Signature during the 2014-2015 bear cycle.

Volume – while often misused – is one of the best ways to understand the overall crowd behaviour on a particular asset. Remember, we aren’t simply trading the indicators. Instead, we are trying to derive information about the mindset of the crowd.

“ Volume allows you to pinpoint the footprints left by the big market players
Eric Krown

Let’s take a look at the low of the 2014-2015. BTC saw a devastating weekly price drop of 45%. This was accompanied with volume doubled that of the preceding weeks of price action. Below is the 2015 BTC weekly chart:

Bitcoin Price Prediction January 2019 in relation to 2015

Volume indicating massive participation during the 2014-2015 bear cycle.

A closer look at the current volume profile indicates low participation. What does that mean? Essentially, we aren’t seeing the same anxious/exuberant selling & buying behaviour that we saw in 2014.  Does that mean we are looking for the exact percentage drop & volume profile repeat once more? No, absolutely not.

Volume in the current conditions showing corrective behaviour.

However, the historic data does give us an idea of the behaviour we would like to see. If we see data that indicates a certain behaviour, then we may conclude that there are signs of a bottoming. As of now, however, we are not seeing any clues that point toward a bottom being in.

Do we believe that we will blow past the bottom right away? No – these things take time. In fact, Bitcoin is showing characteristics that are very reminiscent of it’s consolidation during the $6000 region. It may very well be that Bitcoin consolidates in a very similar way before finally break the $3k region.

That being said, there is one factor that may lead Bitcoin to it’s lows quicker than anticipated – Ethereum.

Ethereum H&S - Breaking It or Faking It?

As mentioned in the previous report, Ethereum does seem to be leading the market. The event-driven rally was followed up with the much expected dump in price. Typical event-driven-market-behaviour:

  1. Event is announced weeks in advance.
  2. Price begins to rally closer to event.
  3. Sell-off begins just before the event.

And this is precisely how Ethereum’s price action has played out over the past month. It rallied closer to the event date, and then the price began to reverse. Additionally, Ethereum seems to be putting together a bearish reversal pattern that points to possible new lows as well.

Typical event-driven market behaviour: Ethereum rallies & dumps.

We typically do not like to point out a Head & Shoulders pattern prematurely – especially since it’s one of the patterns that is most often acted upon far too early. However, Ethereum has all the underpinnings of a Head & Shoulders (H&S) pattern. Eric Crown agrees with the likelihood of Ethereum forming a reversal H&S pattern as well, stating:

  1. Correct shape
  2. Correct Volume characteristics
  3. Correct Price Action characteristics.
  4. Well defined neckline.

“ However, and this is a big “however”... We do not have the break of the neckline yet.

And until the neckline is broken with Volume Confirmation, we cannot call this a fully formed H&S. For now, we can say that Ethereum has all the makings of a Head & Shoulders – but it’s missing the final element: The neckline break

Ethereum Price prediction January 2019

Ethereum shaping a H&S formation – but wait for the neckline break.

So what happens if we do get the neckline break? Well, this is where things get interesting (or scary, depending on your disposition) The measured move for this neckline break points to a price of approximately $70.

While this may surprise people, it’ll be prudent to remember the following points:

  1. Ethereum has already visited the $80 region
  2. If Bitcoin were to make new lows, it’s not far fetched to point Ethereum to new lows as well.

But again, we must emphasize that this thesis is only valid if the H&S neckline breaks. Ethereum is currently sitting at a strong support level. And If the neckline doesn’t break relatively soon, then we could possibly consider the H&S thesis invalidated

Weekly Bitcoin Price Prediction: Summary

Overall trend still remains bearish, and multiple signs point to Bitcoin visiting the $3250 region. While we do believe that Bitcoin will eventually make new lows, we don’t believe that we are likely to break the $3k region just yet. However, Ethereum is putting together a bearish reversal pattern that points Ethereum to new lows. Since Ethereum has been likely leading the market recently, we wonder if it could be the impetus for Bitcoin visiting new lows as well. That being said, all of this is predicated on Ethereum breaking it’s neckline – which it hasn’t done just yet.

Interesting times ahead of us. Interesting, indeed.

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Bitcoin Price Prediction & Update 2019

DisclaimerThis ideas presented in this article should not be taken for investment advice, and are simply the views and opinions of the author

Bitcoin Price Prediction 2019 Market Weekly

This report will be the first of the weekly collaborations between Eric Crown & MangoResearch. Eric is, by far, one of the few technical traders in the space that really knows what he’s doing. He has over 10 years of experience trading traditional markets and market-making for equities. 
What we like about Eric the most is that he doesn’t simply trade technicals – he trades the crowd psychology & behaviour derived from the technicals. We’re excited about this collaboration and will hope you enjoy & learn as much as I have from Eric.

Ethereum Leading The Way

Over the past month Ethereum saw a massive rally of nearly a 100% gain. But as we drew closer to the Constantinople upgrade, Ethereum price momentum began to show signs of exhaustion. This is typical event-psychology-behaviour:

  1. Event is announced weeks in advance.

  2. Price begins to rally closer to event.

  3. Sell-off begins just before the event.

We discussed this move & its similarities to the BCH in a previous post. We mentioned how Ethereum’s event-driven rally may have propped up the market, and how it may similarly lead the market back down after a full retrace.

After breaking down from the top, Ethereum began to form a perfect descending triangle. We discussed this as it was playing out in Krown’s Discord Channel. A bearish formation in a macro-bearish trend is very likely to play out to the downside. And it looks like it did.

Now, the question is – will it do a partial retrace or a full retrace? Ethereum is currently sitting at a key Fibonacci level 116.  This level is more likely to be supported for now. But a bounce from here may lead to an ugly H&S formation.

Bitcoins Reaction: Pointing to a Retrace to $3200

Bitcoin rallied to a local-high of around $4100 level. it was here when far too many people began to call an “inverted Head & shoulders” pattern. Krown, however, vehemently disagree citing the following reasons:

  1. Volume characteristics were wrong
  2. Descending neck line
  3. Overall shape wrong

Krown cautioned against playing this move early, and warned that it could be a trap.

The Golden Cross Feint 

As the price flirted with the $4100 region, the 50 EMA and the 200 EMA began to draw close on the 4hr charts.  When the 50 EMA crosses over the 200 EMA, it is considered very bullish and is referred to as the Golden Cross.

A Golden Cross is usually followed with upward/ bullish price action.  The move playing out would have had perfect synergy with the “inverse head & shoulders”.

However, as price action unfolded on the cusp of the golden cross, BTC witnessed heavy sell pressure. This quick turn to the downside prevented the golden cross from playing out, and instead resulted in a 50 - 200EMA “Kiss”. A clear depiction of the “Kiss” is presented in the image below

Krown had  something pretty profound to say about this:
“The massive dump told you something by NOT telling you something”

When you have heavy selling coming in to avert a bullish move, you know that the big players/bots are still on the sell-side of the market. This further confirmed that the Inverse H&S was more of a trap than an actual formation. With the rejection of the Golden Cross, Bitcoin seemed to follow Ethereum’s lead and swiftly retreated to $3600.

BTC Now Pointing To $3250

The heavy sell-off on BTC led to a clean break of the larger Symmetrical Triangle.  Symmetrical Triangles usually could break either way Why? Because it indicates that while sellers are stepping in at lower and lower prices – buyers are also stepping in at higher and higher prices.

However, since the overall trend is still bearish, we lean toward the downside – but always wait for confirmation of the break! The move to $3600 broke downward on the symmetrical triangle with high volume. This was a clear confirmation.

As can be seen above, the Symmetrical Triangle broke to the downside. The measured move for this symmetrical triangle points toward $3250 – which is really interesting. Why? Because there are a couple of key indicators that are currently showing strong confluence with the $3250.

Lets go over them:

3 Day: “M Stands For Murder!”

Patterns and Moving Averages on higher time frames have a much higher likelihood of playing out and being respected.  The three-day chart is indicating a double top or “M” formation. And as Krown likes to say: “M” stands for Murder! Bitcoin breaking through the $3600 region also coincides with the break of the neckline of the M-formation.

The target for this is typically the length between the neck and the top. Interestingly, this points to a move downward to around $3250 – which has confluence with the measured move of the symmetrical triangle.

Weekly 200 Simple Moving Average

The 200 Simple Moving Average (SMA)  on the weekly time frame has proved itself as strong resistance. The 200 SMA plays a key role in most time frames, but even more so on higher time frames like the weekly.

On Bitcoin’s last drive down, the 200 SMA stopped it in its tracks at around $3150.  The 200 MA is now sitting at the $3260 region. Will we be seeing a retest of this moving average? Overall trend does seem down.

It’s interesting to note that Bitcoin has never closed a weekly candle below the 200 Simple Moving Average. (This doesn’t mean that it won’t happen in the future. It simply means that it’s a key level to watch for a potential bounce. Remember, there’s a first time for everything.)

Pay Heed To Resistance

While we've presented a case of a measured move playing into the $3200s level, it must be noted that price action towards $3200 level may take time to play out, and is likely to encounter resistance on the way. 

As things stand, BTC price hovers around the 0.618 Fibonacci level at $3520, followed by 0.786 Fibonacci level at $3350. Hence, while the trend remains bearish, it'd be prudent to prepare for resistance on the way.

Quick Update: As price action unfolded last night, it turns out BTC met with resistance at the 0.618 Fibb level. Lets wait and watch for what happens next.

Overall Picture - Still Bearish

The trend is your friend until the end of the trend – and currently, the trend is down!

So how do we know when the trend is changing? Well, before we change our stance, we will be looking at a few key indicators to flag green:

  1. Make Higher High's on the daily chart
    So far Bitcoin has consistently been making lower highs on it’s daily chart. This is a strong indication that the trend is still down. This will be the first sign.

2. Open and Close a weekly candle above 200 EMA

Ever since we closed a week under the 200 Exponential Moving Average, we have not been able to break above it. We’ve tested it, but always closed the candle underneath it. Until we close a candle above the 200 EMA, we will stay bearish on the market.

A break above that level will have us reconsidering and looking small opportunities to the upside.

3. A break above the Ichimoku Cloud and/or Cloud Turning Green on 1Day

The Ichimoku Cloud is one of the easiest ways to get a birds eye view of the current trend. If the cloud is red, the trend is down. If the cloud is green, the trend is up.  If the price is under the cloud, trend is down – and vice versa.

Currently, the top of the cloud is sitting at around $5000 to $5200 range.  A break above that range will show a strong indication of trend reversal.

4. A break above the $6000 level!
Finally, a breaking above the $6000 level will confirm that the trend is no longer downward. We will be overall bullish on the market and will look for opportunities accordingly.

Have We Seen Our Lows?

While many people may disagree, we strongly believe that Bitcoin has not seen it’s low yet. There are multiple signals that usually indicate that a floor price has been made:

  1. High Volume Buying
  2. Volatility Index
  3. NVT Signal

None of these signals are flashing on – which makes us lean to newer lows. We will discuss these in greater detail in the next report. But at the moment for Bitcoin our eyes are on some key levels of support:

  1. $2450  zone
  2. $1900 zone

When will this happen? Well, time-analysis can be tricky. These things can take time to play out. It could take weeks, or months… or it may never happen. Remember, we need to first break the $3250 zone which is being supported by the weekly 200 SMA.

Bitcoin Price Prediction: Summary

Predicting price is impossible. We can only discuss what is more "probable". All it takes is one player to change everything. However, as things stand, Bitcoin looks like it wants to eventually trace back to the $3250 level. But since Ethereum is leading the way at the moment, we are expecting the Ethereum bounce to prop up Bitcoin as well.​​

Ethereum Price Prediction: Summary

As for Ethereum, the event-driven nature of the price action makes it rather unpredictable. It is currently sitting at a key support level of $116. And we expect a bounce here. But we also wouldn’t be surprised if it gave up all of it’s gains over the past month and revisits the $90 region.

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Ethereum Price Update 2019

By Shawn Dexter / January 12, 2019

In this post Shawn provides us a brief overview on the Ethereum Price Update for the beginning of 2019. He discusses Ethereum's rally and the sell off that ensued.

DISCLAIMER​: This ideas presented in this article should not be taken for investment advice, and are simply the views and opinions of the author 

Ethereum Price Rallies

The final quarter of 2018 was looking pretty grim for Ethereum. Between early September and mid December the price of Ether saw a decline from $280 to as low as $80.  Suddenly, however, Ethereum seem to have found new vigor and the price recovered to $160. This instilled a lot of new hope (and fomo?) in several people.

But just when price action took a turn for the better, Ether took another lurch downward back to $120. A lot of people who got bullish at the $150-$160 area saw staggering losses. The question is… Could this have been foreseen?

Perhaps.  There were a few red flags right from the beginning. In this weeks Ethereum Price Update we’ll go over some of the signs that pointed toward this move potentially playing out.

Ethereum’s Similarities to BCH

On November 14th 2018, Bitcoin Cash was to undergo a hard fork – a big event in the crypto world. Two weeks prior to the event, Bitcoin Cash began to rally. The price surged upward from around $410 to $630.  However, seven days before the actual date of the event – the price began to decline. And it do so rapidly! In the next seven days leading up to the event, Bitcoin Cash dropped all the way back down to $410. It literally gave back all it’s gains.

Ethereum, so far, seems to be following the same story line. Ethereum’s hard fork - Constantinople - is scheduled   Jan 16th, 2019. This hard fork has been long awaited by the community since it delivers the Block Reward Reduction that everyone wanted.

After seeing a decline from $280 to $80, Ethereum began to rally around December 15th (almost a month prior to the fork).  The price rallied all the way up to $160 and instilled excitement in the entire crypto community. Ethereum was leading the market, and the other coins (Bitcoin included) seemed to have been following suit.

But in an almost “deja-vu” sorta way, Ethereum lurched downward exactly one week before it’s long-awaited hard fork. Within a day the price of Ether declined from $150 to $120.

Apples to Apples: Events to Events

Now, a lot of people are going to say “No!  the Bitcoin Cash fork was contentious! The Ethereum fork is a bullish update!”

The truth is that it doesn’t matter what the event actually was. All that matters is the crowd-psychology and the emotions people go through leading up to the event. For example, these are a couple of possible mindsets:

Bitcoin Cash Fork:  “Omg, this is my chance to get free coins! I’ll buy and sell right after the fork”

Ethereum Fork: “Omg, this update is so bullish. I’ll buy before the update and sell when things get crazy!”

In both situations, ‘investors’ are being baited to buy the top – and then inevitably get dumped on.

Ethereum’s Retracement

Remember, BCH gave back 100% of what it gained in the seven days leading up to the fork. Now the question is: Will Ethereum also undergo the same retracement that BCH did?

Perhaps. It’s key to note, however, that the BCH rally spanned only one week. The Ethereum rally, on the other hand, spanned almost a month. Usually, these things come down as fast as they went up. So Ethereum may take a bit longer to see the same retracement.

  Things come down as fast as they went up!

That being said – all it takes is one big player to change things.  A big player with a large enough sell order can cause a quick retracement to the downside. Similarly, another big player with a large enough buy order can cause a real market turn around to the upside.

Yeah, I get it - this is probably not helpful. But this a probability game – and nothing is for certain. If you’re trading (or ‘investing’) in this market, you need to come to terms with that.

However, if you’re thinking about being a buyer at these prices there’s one more thing I’d like to discuss.

The Impetus to the Big Dump at 6k

Bitcoin was sitting around it’s major $6000 support at the time of the BCH fork event. Leading up to the event, bitcoin saw itself rally to $6500. Again, this instilled a lot of hope in the market. But the Bitcoin Cash dump seemed to have led the way for the rest of the market as well. Bitcoin was rejected at $6500, and went on to break the key $6000 level that it was being supported at for a long time.

The Bitcoin Cash fork & dump seemed to have been the impetus for the major 6k break. Today the major level everyone is eyeing is the $3000-$3200 region.

Will the Ethereum fork prove to be next impetus for the major break? It will be interesting to see how things play out .

Until then, just remember: The Trend Is Your Friend. Going against the trend is like trying skiing uphill. Protect yourself.

(None of this is financial advice.)

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The Animal Spirits in Crypto – Irrational Exuberance & Crypto Bubbles

Three times.

Three times this week I was asked the following question:

“Why are the prices still low when the fundamentals seem so strong?”

Fortunately, there’s a two-worded answer:  Animal Spirits 

It’s not a simple answer – not by a long shot. But it is, indeed, a short answer that encompasses the intricacies of greed, fear and human behaviour.

To understand this, let’s first question if prices are really low? Or are we simply benchmarking prices at their all time high  –  prices that were guided by the animal spirits of crypto investors.

John Maynard Keynes, a famous economist, used the term “Animal Spirits” to describe the irrational decisions investors make in an uncertain environment.

But today the phrase “Animal Spirits” seems to be used primarily in environments of high confidence.  Confidence & optimism, however, aren’t the only byproducts of Animal Spirits. Fear & pessimism play an equal share in the phenomenon.

Irrational Exuberrance. Irrational Anxiety

Should it not then make sense that irrational confidence be followed by equally irrational fear? Optimism that drove prices to exuberant highs should follow with a similar anxiety that would drive prices to irrational lows. For if it does not follow, eventually at least, then perhaps the optimism was not irrational after all. In a way, this explains the driving mechanism of “bubbles” (and also why it’s claimed impossible to forecast)

Nobel Laureate winner Robert Shiller defines a ‘speculative bubble’ in his book ‘Irrational Exuberance’ as follows:

 I define a speculative bubble as a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, and, in the process, amplifies stories that might justify the price increase…”

Shiller akins a bubble to that of an epidemic virus – something that can “catch” and get out of control very easily. Similar to their virus counterparts, speculative epidemics can result in massive losses when culminated with doubt, fear and anxiety.

But the key question here is: Are we already past the irrational anxiety?  Or is it yet to play out?

Recurrence of Epidemics . Reflating of Bubbles.

Interestingly, Robert Shiller makes sure to emphasise that “speculative bubbles” don’t simply burst and disappear. Rather, they tend to inflate and deflate in accordance to the accepted narrative.

A viral epidemic can reappear if a new environmental factor reignites the contagion rate.

Similarly, a deflated speculative bubble can “re-inflate” if a new narrative is strong enough to ignite the animal spirits of investors.

Ah, but this poses yet another tricky question for the crypto space.  Have we already “re-inflated”? After all, prices did surge to an all-time-high of $1000 before deflating to $200.

Have we already re-inflated?!

Is it possible that we see another epidemic spark the animal spirits to a point irrational confidence?

A Great Time To Be Alive

A strong argument can be made in favour of another speculative bubble – a larger one. In his definition of a “speculative bubble”, Shiller goes on to explain what follows the price increase in a speculative bubble:

...The price increase brings in a larger and larger class of investors, who, despite doubts about the real value of the investment, are drawn to it partly through envy of others’ successes and partly through a gambler’s excitement”

The crypto market allowed for a new class of investors to be first entrants. They consisted mostly of people who were young & technologically sophisticated. But they were by no means the “large class of investors”. Those are yet to come in mass.

Already we hear  reports of new & larger entrants into the market. Will their success draw the envy of other institutions? And will that, in turn, lead to an environment of overconfident gambling and exuberance that we have seen in the past?

Only time will tell. But one thing is certain, never before have we seen events play out at this rapid of a pace. Ahh, what a time to be alive.

Related Readings:


The Myth Of The Rational Market - A history of risk, reward & delusion by Justin Fox

Irrational Exuberance by Robert J Shiller

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Bitcoin’s Arrival In The Institutional Market – What It Means In The Long Run

Ever since Bitcoin was created in 2009 by Satoshi Nakamoto, it has largely been pushed aside by the traditional financial services industry and the institutional space. A similar attitude has been displayed towards most cryptocurrencies and digital assets, based on fear and the fact that very little was known about these new “actors” in the industry. Now that they are gaining traction and have received the attention of millions of investors, lawmakers and governments are beginning to address the question of regulation for these virtual currencies.

This war between the institution and the new wave of digital assets has been going on for years. However, it seems like we are noticing a shift in mentality and approach from the institutional space towards bitcoin. More and more financial organizations are changing their opinion about the first-ever virtual peer-to-peer currency and have developed interest in these new forms of potentially lucrative investments for their loyal customers.

In this brief overview, we will see how the tide is turning for bitcoin and how it is becoming one of the most sought-after assets by large and reputable financial firms all across the globe. In turn, we will demonstrate how this could eventually lead to the crypto markets regaining their strengths and how we might be on the cusp of one of the largest bitcoin bull runs in history.

Bitcoin & Institutional Investors - The SEC, ETF's and More

Some recent events and news have been very positive for bitcoin and its slow but steady breakthrough within the institutional space. Institutional investors refer to large entities such as banks, hedge funds, insurance companies, investment groups and more. The first major news that has been affecting the space as of recently and that showcases bitcoin’s growing position within the institutional markets is the upcoming (and recently delayed) decision by the U.S. Securities and Exchange Commission (SEC) regarding the approval of a bitcoin exchange-traded fund (ETF).

An ETF is a fund that represents an asset’s value and that is traded directly on the stock market. They are considered passive investments.

In the recent weeks, the cryptocurrency community, as well as actors in the institutional space and even some members of the SEC, have been strongly advocating for the creation of a bitcoin ETF. This truly shows that there is a heavy desire from financial firms and large investors to join the cryptocurrency trend.

Another recent report by Forbes has stated that the Northern Trust, a financial services firm that has close to $10.7 trillion in assets under custody, has opened their doors to companies involved in the crypto space. In addition, the firm is supporting multiple blockchain-based projects. Moreover, Northern Trust’s President, Pete Cherecwich says he believes in a tokenized economy and future.

The Launch Of 'Bakkt' - A Global ecosystem for digital assets

The Intercontinental Exchange (ICE), parent company of the New York Stock Exchange, has announced that it will be launching a new company called Bakkt which aims “to create an open and regulated, global ecosystem for digital assets”. It will enable big organizations to purchase, sell, and safely store virtual currencies and other decentralized assets. With large companies such as Microsoft and BCG involved in the project, this shows how blockchain-based applications and crypto-assets are gaining in popularity and are making their way through various industries. The ICE also plans to initiate a one-day physical bitcoin futures contract when Bakkt launches.

NBER Analysis - Cryptocurrency Forecasts

Furthermore, the National Bureau of Economic Research (NBER) recently published a 70-page-long report on the “Risks and Returns of Cryptocurrency”, analyzing three major coins: bitcoin, ripple, and ethereum. The fact that this paper is being published already shows that cryptocurrencies are actively being discussed by institutional investors. The NBER explains a “strong time-series momentum effect and that proxies for investor attention strongly forecast cryptocurrency returns”. The report even goes as far as recommending investing in digital currencies with “1 or 4 or 6 percent in bitcoin”.

First Cryptocurrency Index Fund?

Lastly, popular cryptocurrency exchange Coinbase has recently announced the launch of the Coinbase Index Fund. It allows institutional investors, with a minimum investment of $250,000, to place money and bet on the performance of the Coinbase Index. The Coinbase Index is composed of all the coins listed on the American giant’s platform. We clearly see that the desire to invest in cryptocurrencies is not strictly one-sided, but that the crypto space is also eagerly waiting for these institutional investors.

Long Term Upward Trend

As many have said over the last months, institutional money is on its way and it could be extremely positive for bitcoin and its value. Although the markets have been experiencing bearish trends and severe downturns in the past months, bitcoin and other major cryptocurrencies such as ethereum, litecoin, or ripple still show a lot of potential for growth and progress. With all the new excitement and innovations in the crypto space, in addition to the institutional investors finally joining the movement, the market has a lot to look forward to. Banks, financial organizations, hedge funds, and large investors are now less hostile towards these new digital assets, which are nothing short of programmable money. Coins and tokens have become more attractive and offer incredible potential, and institutional investors are aware of it.

Bitcoin & The Institutional Market - Summing It Up

In conclusion, there has been a shift in the way digital currencies, especially bitcoin, are viewed in the institutional space. Previously considered scams, frauds, and even fake, they are now starting to be looked at as real financial assets with considerable potential and upside. In this article, we have seen that numerous events have cemented the belief that opinions are changing, and so has the place of bitcoin in larger investors’ hearts. As a result, we can probably assume that the crypto markets will be positively impacted by the increase of institutional investors in the near future. 

About the Author

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​Mati Greenspan

Market Analyst @eToro

Senior Market Analyst at eToro; a man very up-to-date with the goings on of the Crypto markets. Follow him on twitter and other mediums at the links below.

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