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Crypto More Pain To Come @ Crappy Trader Notes #12

Unpopular opinion — we are not at the bottom yet. I know that the crypto space is longing great profit probability — but unless you are a professional trader I dare to say that be patient. Hold your cash and please do wait for great opportunity — you shall be rewarded greatly.

Well If you hit the crypto-sphere you can feel emotions in the air. Go to crypto twitter and you will see and smell what I mean. Many are happy that and.

Here is an example of a crypto twitter hopium:

However, these are just the opinions so maybe let’s have a look at facts instead?

Fact #1 — bottom is near so how to know when bottom is in? (updated)

What? You say there is a pain coming yet you claim that bottom is near. How come? You may be surprised but being bearish mid term I’m bullish long term.

On the weekly timeframe there is a nice bullish structure building up. As you can see we hit heavy oversold condition so in the long term we are ready to move up. But we are still open to eventual 20%-50% correction before the real bottom sets in. So if one is comfortable with handling such loss in short term then it’s fine to enter now. But if you wish to buy really cheap that you need to be patient.

However, wise trader would notice that it is too early to enter. I wait for following elements to occur in order to start my DCA into a new bullish run (here I’m updating time to time when certain indicators are met):

  • retest of June lows — such massive almost yearly decline in BTC price won’t likely reverse in a v-shaped manner. (✓ 9th Nov 2022)
  • more ranging to build solid accumulation base for a future move up. It will take weeks maybe months but if we are to enter a new bull cycle BTC needs to be accumulated by strong hands and eventual supply must be taken from the market for price to rise again.
  • a bullish divergence. That is why I’m expecting more pain coming. One last leg down accompanied with signs of move exhaustion on the RSI and MACD graphs would be a trigger for me to start accumulation.
  • seeing low, declining volume accompanied with less and less volatility. So shorter thrusts, narrower price action on a declining volume after weeks of ranging. That is a view that I long to see.
  • sort of a “black swan” event like a top tier fraud or bankrupcy (✓ Luna Collapse at 13th May 2022, ✓ FTX bankruptcy at 11th Nov 2022)
  • mainstream media hailing end of crypto all day long with massive FUD from influencers (✓ The Economist Crypto’s Downfall at 19th Nov 2022, ✓ Ongoing N. Roubini Crypto Twitter FUD )

Fact #2 — wave count and structure

Elliot Wave approach gives us a hint that a final, fifth wave is coming.

And as this move should reach new lows, one needs to look at eventual demand zone 10–13k BTCUSD from late 2020 as a bottom candidate.

Fact #3 — bearish daily structure

On the daily there is a space for a noticeable move down.

Moreover, recent third attack on the 24kBTCUSD level seems to be rejected and each of the attacks presents diminishing volume and power.

That is why I find recent PA as a typical Upthrust after distribution which is a sign of an incoming move down.

Fact #4 — local P&F count

When we take another TA tool, i.e. the point and figure count, one can see that the base that is building is short of base capable to sustain noticeable move to previous ATH.

As you can see below, we have two counts that give us 10k-12k BTCUSD zone in the bearish scenario and 30–32k BTCUSD in a bullish scenario. But really this base is to weak to treat it as a real bottom.

As the daily structure is bearish I find the bearish scenario more probable and aligned with aforementioned characteristics of a massive accumulation behaviour.

Summary

Be patient. Bottom is near but the true bottom structure needs more time to build. Hold your cash for at least 17k BTCUSD or even 10–13k BTCUSD levels. They will come for sure but it may take some time. But it’s worth it.

As always stay safe & liquid. When times are hard, cash is the king.

More reading

If you want to see how did i come to current predictions i recommend reading previous chapters of the blog. Therefore you can follow my reasoning and see how genuine my remarks are.

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Yenten Observer

Cryptocurrency freak. Freedom, ecology and free market above all.