Crypto: The Ultimate Test of Patience - Buying Opportunity Soon

アップデート済

I'm using the XRPBTC chart here, but the same can be said for most major alts as well. This is a popular chart, so I decided to use it as an example.

This is a new view on the market that I have been thinking about recently (and posting about), and the last couple of days have convinced me more that this could indeed play out. The market does not want to go parabolic right now. It wants to drift sideways. We needed to see follow-through on this XRP run, but we didn't. This is okay. However, as we've been seeing, many alts are drifting down to their lower supports, in what seems like a crypto-wide mini-capitulation move. Why is this happening? There are some possibilities:

1) The stock market looks very weak, and people are simply getting out of risky investments. Interestingly enough, the coins that are crashing the hardest are the platform coins, which rely on ecosystems of big businesses for network usage. The coins that are the most stable are the currency coins like XRP, BTC, XLM, etc. This may be because platform coins likely won't see as much usage during an economic crisis, and won't be as profitable, whereas new pure currencies may be an important solution to coming economic problems. This is definitely something I'm thinking about, and am considering re-structuring my portfolio a bit for this reason and going even more heavy in XRP and XLM. Others might be thinking the same.

2) Traders- Yes, this market is flat right now, so traders are selling at resistance, only to buy at the already established bottoms for many coins. We can see this happening with WTCBTC (been between 4100 and 5000 for a while now), NANOBTC (been between 2600 and 3300 for a while), etc.

3) Crypto is done for - Certainly possible, but improbable in my opinion. It's really up to the rest of the world to believe in it at this point. More people are asking me about crypto and considering getting in, so this is a good sign. I see news articles saying "Stock market crash likely to cause an increase in Bitcoin's value." Also, I think the dollar will crash soon along with the stock market:

The U.S. Dollar and The "Desperate Hand" Pattern

The last several days, alts have had many attempts to bounce off support zones, but have failed every time. This is not necessarily bearish. This may indicate strong buying going on in a demand zone. There is no demand above this very narrow zone, so the purchases are quickly getting sold. But to me, this is a sign of accumulation. I think this can go on for another few months. Alts just keep extending their bottoms. Even though this XRPBTC chart looks pretty strong, I wouldn't be surprised to see a breakdown and then a slow rise along the support in the 6200 area for a while, until breaking up sometime in February/March (outlined on this chart). Right now, nothing is telling me that a massive bull run will happen in the short term, but of course I could be wrong. These are the moments where bulls can catch you by surprise. Right when everyone gives up and walks away. So of course this is a possibility as well, but very unlikely, in my opinion.

Watch for the capitulation going on right now. There will be a very good buying opportunity soon, if not already. I have a hunch that this drop isn't over yet though. Hopefully we can hold the 200B total market cap line, as this has held for months now and has proven itself to be a solid bottom.

If you look at my analyses, most of my play-by-play price action strategies have been pretty spot on. I haven't been trading my setups though because I find that I get in my head a lot about whether or not my decision was the right one. This shows I still have a lot to learn as a trader. However, I've gotten very good at predicting target points on breakdowns, as well as resistance and consolidation zones. At this point, I'd rather be doing this for other people's benefit, rather than my own. However, due to the fact that I have other things going on in my life, I won't be updating on here as much. I need to take a break for my sanity. I think I'll stick to my original plan of selling a bit when one of my coins goes way up, in order to rebalance my portfolio and lock in some profits.

Here are my other posts and subsequent updates, for quick reference:
Previous XRP analysis:

What's it with people and Ripple Nipples?

BTC (where I first posted this new view on the market several days ago):

XLM analysis (broke out of triangle, now back in it):

BAT (predicted the test of 6000 and breakdown):

I Would Love to Be Bullish on BAT, But Indicators Say Otherwise

VET:

TRX:

TRX looks like it could begin a new cycle soon

NANO:

WTC:

NEO:

ETH:

EOS:

EOS has one of the most bullish charts in crypto

GVT:

Feel free to give a like, and let me know what you think!

This is not a recommendation to buy or sell. I am not a professional financial advisor. This is my newest view on the crypto market, and what's been going on. I'm sure it's been frustrating for many people.

-Victor Cobra

ノート

In conclusion: I think we're likely to see an extended period of low volatility, even for alts. The only way to avoid this would be to ignite a bull run in the next few days or so.

ノート

Another idea that we cannot rule out is a final capitulation move by the market. For a while I've been waiting this to happen, but it's taken so long that I didn't think it would. However, now would be a moment when this could start happening, since we've had so many failed breakouts. XRP still has room to go down to its lower trend line (in the 2500 area). This is a worst case scenario. Be prepared if this happens. This is the only situation where I may add a little more fiat.

ノート

It'll be really interesting to see what happens here. If we bounce back hard very soon, this was likely a giant shakeout. If not, then I feel like we will follow my scenario.

ノート

Looks like we're following my scenario of an initial drop. Many alts are failing at their supports. We may not be holding the 200B line this time, in which case support is a ways down. This is the buying opportunity I was talking about. I believe this will be the final capitulation by the market, and the last real buying opportunity. It might be smart to wait until we see any bounces, since I think it's likely to ride along the bottom for a while.

ノート

This may indeed be a final shakeout move. Wait to see how it plays out. BTC needs to hold that 6200 area (Bitfinex and Binance).

ノート

Anyway, done updating for the day. Going to step out and enjoy my life. This was the capitulation move I was suggesting could happen though. It may not be over yet. Many alts might make new lows, while the strong alts continue to ride their supports. This is when the weaker projects are truly flushed out.

ノート

One last thing: Selling volume for alts does not appear to outweigh the recent buying volume. This MIGHT indicate a strong bear trap. The opposite is the case for BTC though so these are mixed signals. This might tell us something about the EVENTUAL direction of the market. This means that many are eager to see strong alts move up. However, if selling volume continues to increase for BTC and alts, capitulation might be strong.

ノート

Hard to stay away from the charts on a day like today haha. XRP Wicked nicely on the upper trendline of my chart (around 7200). This is actually the best case scenario. We're seeing some pretty strong bounces on some alts so far. This might indeed be the final capitulation event. Chances are getting stronger that we will either follow the green line in my chart, or we will actually see the bull run start here if enough buying momentum is created. However, BTC has made a new yearly low on USD exchanges. This is bad for BTC in the long run, and this runs with my narrative that it will be outclassed by strong alts like XRP and XLM within the next couple of years, if not sooner.

ノート

BTC on Bitfinex is just BARELY holding above the broken triangle resistance line. It really needs to see follow through on this bounce ASAP to avoid heading down into the 4K area. Some alts are bouncing hard, but not others. XRP and XLM holding strong so far, as I figured would probably happen. However, if BTC drops harder from here, we may see their supports fall as well. BTC Bitfinex chart:

Zoomed in:

ノート

The market is making a very strong attempt to rebound here, with XRP and XLM leading the way. These moments have the potential for strong reversals. We'll see if we can sustain and push higher. If we get back above the 200B market cap line quickly, this may have been the final capitulation move by the market.

ノート

Since XRP and XLM are looking so strong, they are actually beginning to suck some of BTC's dominance (especially XRP). If BTC can't rebound, it's likely some strong alts will maintain their support levels and start a bull run sometime by the end of the year, or the beginning of 2019. During this next bull run, I think it's very likely Bitcoin will lose its dominance. We'll see how this continues to play out.

ノート

XRP needs to make a higher high versus BTC to continue this rally. Particularly watching the 8600-8700 level. We already broke some pretty significant resistance on the XRP/ETH chart (been watching this for a while). If we fail to break through the 8600-8700 resistance, XRP may capitulate as well and drop at least to the lower rising support in the 5000 area before stabilizing at 6200 for a couple months of sideways (total speculation, obviously). This is a strong possibility, given the state of the market. Always be prepared. It looks strong so far though. Rebounding pretty well in USD value over the last day.

ノート

If we break 8800, we will likely target the 10000 area soon. If this rally continues, it will likely be the decoupling that I've been expecting for a couple months now. A while back, I speculated that if BTC broke below 6000, most alts wouldn't fall below their August 13th lows. So far, this has turned out to be the case. Yes, this means that I am more bullish on alts in the long run than on Bitcoin. Investing in many of the major alts at the August 13th lows or even in the last several months would have been more profitable than investing in Bitcoin at its "lows."

ノート

Do watch for XRP sellers though, since we just got rejected in the 8600 area. This is a very sensitive time for the market.

ノート

We need a much bigger push soon.

ノート

This zone is crucial. It's a good sign that we haven't dropped like a rock after hitting the 8729 resistance. We need to break through convincingly if XRP is going to continue its bullish trend. See how important this resistance is:

ノート

Resistance broke, but not convincingly yet. We need a nice impulse move soon in order to confirm. The next major resistance is in the 9300-9400 area. Then 10000.

ノート

Haven't been posting many updates here, since I'm trying to mostly check out for now. Pretty difficult to do though. Just waiting for a moment where I might feel comfortable putting a LITTLE more fiat into the market. Some of these alts are really getting annihilated. As I expected, XRP and XLM continue to remain relatively stable. Should have gone even more heavy in those two coins (already my main long term positions), as I was considering the other day. The possibility that XRP overtakes BTC within the next year is increasing. However, we are right at the major 10000 resistance. Might be a good time to lock in some profits as it can drop hard from here if the market continues to look bad. I'm pretty much done trading crypto for now though. Managed to increase my positions on some coins through rebalancing, and I'm comfortable with most of my entries. Just will have to let it ride out, or wait for BTC at 4K-3K, which is when I might put a little more into the market.

ノート

If XRP and XLM continue to remain strong against BTC, some other alts with strong fundamentals MAY start to take the hint and begin to decouple as well.

ノート

I'm gonna go out on a limb (because this is my crypto journal, after all) and say that another coin that could decouple is NANO, even though it has been pummeled in the last few days. This runs with my narrative that currency coins (other than Bitcoin, which is neither fast nor cheap) are the most attractive to investors at the moment, as the U.S. Dollar is likely on the verge of a collapse, along with the stock market. This doesn't look good for platform coins though, like NEO, which may continue to see new lows.

ノート

We should see some pretty large buying in this area, since we are in final support zones for many alts, including ETH and NEO. If those fail, we will be seeing single digit NEO and double digit ETH. 4600 has also been a zone of interest for BTC. XRP keeps going up in BTC value, and I'm starting to get skeptical, but it could be the canary in the coal mine for a pending bull run. Whales are choosing it as a safe haven, so it could see a drop if BTC decides to finally make a bounce. Or, of course, people could just continue to fomo into it if it starts rapidly increasing in USD value.

ノート

XRP and XLM dropping as BTC is bouncing, as I said was likely. Same with NANO doing well. Many alts still look weak and have broken previous supports. We need BTC to bounce back above the triangle support (around 5200 on Coinbase). Today's bottom just about touched the long term log trend line created by the final capitulation in 2015. I would've absolutely added in that area (4100-4300), but I've maxed out the money I'm willing to part with in this market for now. Bouncing from there was pretty expected, but we need to see some serious follow through. If we slide back down and that log line breaks, it's pretty much straight down to 2.9-3K for BTC.

ノート

Based on current price and volume action, it seems that this bounce will not be sustaining for now. Originally in this analysis I said we'd likely drop lower and then remain a bit sideways until late December 2018 or early February 2019. If we stay in this area, and ride the log support line up, this would confirm my scenario.

ノート

Just found out that Bakkt has been delayed until January 24th, which coincides with my speculation in this analysis that the bull market may not return until February 2019. But if BTC drops the log support at 4100, 3K is in the cards, and we will be in serious bearish territory.

ノート

One thing is for sure, these giant swings on some alts are a daytrader's fantasy. Super easy to accumulate more of certain coins, as some of these are swinging 10-20% in short timeframes. At least volatility is back for traders.

ノート

It looks like XRP is essentially following my green line (for now). If it were to really follow it (obviously total speculation on my part), it should consolidate a bit here for a while.

ノート

Continuing to consolidate. If we happen to follow my scenario, we should remain in the 8800-9400 area BTC value wise for a couple of months. We can always drop to either of those rising trend lines, as they've offered rock solid support in the last several months. This does not mean that we can't continue to drop in USD value if BTC finds a floor at lower prices. The 32 cent area is pretty good support, but if that fails, we should be down to 27 cents at least.

ノート

Small update: alts are bouncing around against their long term support and resistance levels. TRX, XRP, and NANO are the strongest looking alts at the moment, as all three have actually held their supports versus Bitcoin for months now. XRP and TRX are actually higher than they were on the ratio since the market-wide crash. NANO is sitting at $1 support, well above its August low of $0.75. Some other alts have dropped to new lows, like ENG, WTC, and NEO. I figured this would happen (you can read my other posts to see why). XRP is still holding 8700, but if it drops below, we'll be retesting some lower supports.

The most concerning thing about the market is that Bitcoin has failed to retake the broken log trend line (so far). We got perfectly rejected at that line during the highs of this past week. This is significantly bearish. At this point, it seems more likely that another capitulation event should happen before we truly reverse. Where that occurs is anyone's guess, but I have a small amount of extra fiat that I'm only willing to put in if this happens. I'm looking at the $2500-2900 area for Bitcoin, 10 cents for XRP, and 5 cents for XLM. I'm not really looking to trade at this point, since it takes up too much of my time. Just looking at long term investing, and it would be nice to be able to enter a final position on one last big selloff.

ノート

Oh, and BAT looks very strong too, against Bitcoin. It might actually break out of its year long pennant (finally).

ノート

Well, it's been about a week since I've updated this chart. I made it when Bitcoin was still above 6K, so I think it's aged pretty well. I was certainly right in my title. A buying opportunity has indeed presented itself and patience will be absolutely necessary moving forward.

Since my last update, things are looking much less hopeful, market-wide. BAT has failed again to break out and most major alts have broken down on key supports. However, XRP has held its BTC value very well. This may not last longer, but so far it's been following my green scenario perfectly. We really may just go sideways until the end of January, when the market will probably react in one way or another to Bakkt. If we break down, our nearest support is at the uptrend we've bounced off twice now (October and November). That currently lies around 8000.

ノート

Looks like we may be headed down to meet that light blue support again. What happens there should dictate the direction for XRP into 2019.

ノート

Possible scenarios from here on out. These are potential bounce areas. Currently the 8200 zone provides the closest support, while an ultimate bearish target exists in the 5700 area (lower trendline). In the below chart, you can see why I have drawn my lines where they are, and how important they have been in dictating recent price action.

ノート

We've followed my original green line pretty close so far. We are almost to the make or break point. Looking at this chart, we seem to be forming rising support, and if this breaks out to the upside, we could easily see a 100% gain. Even though it's a lot higher than where we are currently, it's probably safer to long the breakout of 12K than buy where we are currently.

ノート

VERY close to the uptrend line now. Let's see if it holds.