MT20140602 23:23 Trend Analysis of Democurrency
Bitcoin:
I’m overoptimistic because of the great rising. There should be a decline at the price of 4300 in the view of technical, so the technicals will not hesitate to sell at the price. Because volume is not big, so this selling will result in a decline.
In last night, Bitstamp rebounded quickly and overwhelmed the Chinese market in a little volume. This is because that the selling orders are few on Bitstamp.
Then price on Bitstamp suddenly dived at 2:30 last night, and the price of Bitcoin declined from $680 to $640 in 14 minutes, and to $620 in next 15 minutes. The total trading volume in this process is less 4000 Bitcoin. It’s a large volume in Bitstamp, but not big compared to Chinese market. This happened at night so it declined passively in Chinese market(because buyers won’t stay up late, only coin holders do), but the volume is bigger than foreign market.
In the morning the selling wave in Chinese market is still dominant, so trend is weaker than foreign market and finally price declined to yesterday’s starting point.
But the trading volume today is obviously fewer than yesterday, and is at low point in this round.
I can’t help comparing this with the trend of rebounding to 6000, I was overoptimistic at that time too.
There were 3 strength leading to the great decline in 7th January:
1. The profit taking position from early period. When they were hesitating to sell at 7000, it declined to 2000, so they hurried to sell when it rebounded to 6000.
2. The profit taking position from the bottom. The volume was 300 thousand at 2000, and the price went up by 2 times within half a month and into a compact district. So they were willing to sell.
3. The covering in the top. The price became 2000 in a few days after they bought at 6000, so they would sell coins as soon as possible when it rebounded to 6000.
Here’s how these 3 strengths act in this round:
1. The profit taking position from early period. Those wanna sell have already sold through the long bear market. Those not wanna sell will not sell at such price.
2. The profit taking position from the bottom.The price has just rise by 50% from the bottom of 2700 formed under the suppressing of PBC. So those dare to buy then will not sell at this price.
3. the covering in the top. the reasoning is the same as point 2. They would not hand over their chips when the bad times just went away and profit just emerged. They go for the big trend later.
Thus the drive of this decline is mainly operation of the technicians. The trading volume was several thousand coins at 3500-4300 in February and March, total turnover rate was nearly 100%, so there must be some people wanna sell now.
From the short term analysis perspective, the intuition is: the decline is not a dive but 3-back-2-up slow decline. The volume is low, it tells us that the wave of selling is really few. When the buyers restore confidence ,the price will go up again.
Altcoin:
Altcoin Index 1 is 6.64, up 5.3%. Altcoin Index 2 is 2.63, up 8.2%.
Bitcoin declines today, but Litecoin not. Darkcoin rises by 14%, so Altcoin Indices rebounds greatly.
It is only Darkcoin’s show in recent Altcoins’ world. It is not rational to speculate it at this time. And the application of Darkcoin are less than DOGE.
Less market maker enteredthe Altcoin market “thanks to” CCTV and PBC. You konw a market maker of a stock has a capability to manipulate 100 altcoins. We should wait for the history replay. The speculators in this round have been appalled by altcoins and dare not to involve them. But the speculators in next round will crazily crash into the altcoins like what we did last year after the next Bitcoin bull round. So farsighted market maker, invest 10% capitals to build positions in altcoins, and you will reap startlingly good returns.