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Cryptos Analysis jan 2019

HomeAnalysis — Cryptos Analysis jan 2019

A Look at Cryptos in 2019

Before I get into my outlook for cryptocurrencies in 2019, let’s look at some historical data.

Because, if you can’t clearly and rationally see the past then you can’t possibly predict the future. And, many people, after a brutal 2018, believe that the crypto market is dead. This data shows that is not the case.

First, let’s look at the average daily value change in bitcoin since 2010:

2010: +0.82% 2011: +0.76% 2012: +0.26% 2013: +1.11% 2014: -0.25% 2015: +0.09% 2016: +0.22% 2017: +0.78% 2018: -0.33%

These numbers are very interesting for a number of reasons.

The first is that bitcoin has had many years where it averages a daily gain of close to 1%. By any metric that is pretty insane.

But, secondly, there have only been two down years since 2010. Those were 2014 and 2018.

In 2014, bitcoin was down an average of 0.25% daily. And, last year, it was down 0.33% on average. Meaning, 2018 was not massively different in size than 2014. And, look at what has happened since.

In other words, this has all happened before and 2018 was nothing extremely out of the ordinary.

The following numbers, though, show the reality of the situation. And, it’s a very bullish one.

Put aside all-time highs as a metric and look at bitcoin’s yearly lows:

2012: $4 2013: $65 2014: $200 2015: $185 2016: $365 2017: $780 2018: $3,200

If you were to look at those numbers completely out of context as being the performance of an unknown investment, what would you say?


I know what I’d say: Holy cow! From $4 in 2012 to $3,200 in 2018 with only one small, minor decrease in 2015.

Looked at this way, bitcoin is still in the biggest bull market likely in history.

While most people are wailing that bitcoin is dead the above numbers actually scare me in a different way. The increase in the all-time low from 2017 to 2018 is the second largest only to 2012-2013 when bitcoin rose over 1,000%.

In other words, judging by these numbers we are still in a massive bull market in cryptos. My only hesitancy is that it may not have gone low enough as a pullback in 2018.

That said, I think we are close enough to the bottom to be eagerly buying here.

Yes, if we have a worldwide financial crisis that causes the herd to go into full panic mode we could see the cryptos take one last hit. But, we also may not.

BTC TA, and update

An observation about the latest plunge in bitcoin prices. I’m not sure what it means yet. Obviously it suggests a long liquidation though, since, at least according to the bitfinex data, the shorts did a lot of covering in the days leading up to the breakdown from the triangle (see below), or what previously looked like a developing head & shoulders bottom, as per my Whatsapp post just before the latest plunge. See the chart and the post reproduced in the text box below. Note by comparing it with bitfinex short activity on the following page how the “right shoulder” noted in the first chart below was driven by a short covering.

The selling since this post may have been related to subsequent news about the 51% attack on ETC Classic.

But then, it could have been anything, including just a test of support levels.

As I pointed out in the Whatsapp post, the pattern that appears to be developing isn’t necessarily the one that will develop, which is why it is important to wait for confirmations when your trading breakouts

The market is at $3550 at the time of writing, after a small bounce to $3800, hence it is sagging below that December low right now. The implication of the failure at $3657 is the aforementioned $2690 target price.

And yet, I’m still not convinced it will go there.

I’m still not convinced this was a real break down. Sentiment is just too bearish. It’s possible though, and if you are trading it, I would stick to what the chart is telling you, short the damn thing for a $1k decline.

If for no other reason than the fact that the short covering did nothing for the price.

But still, I don’t trust it enough to recommend the trade, and I would much rather buy this weakness for the long term, as per the expanded allocation that we have been beating the drums about down here.