Wednesday, January 3, 2018

Bitcoin Business

Yesterday Bitcoin broke higher out of a descending trendline as I showed in yesterday’s update.  From there it consolidated, then began to move higher last night until the Chinese announced they are going to heavily regulate Bitcoin miners.  Ostensibly their cover is that the miners are using too much electricity! 

No, Bitcoin mining is probably saving electricity over the industries it replaces.  The Chinese simply are fearful of freedom, thus they seek security with their socialist controlling centralized ways.  Guess what?  Bitcoin doesn’t need any Chinese miners, it will continue on regardless of what they do or say.  Eventually they will be forced to capitulate to the world’s rising consciousness, but all the sociopathic controllers will only do so kicking and screaming as “their” world decentralizes away from them.

But they did manage to interrupt the new uptrend, but only temporarily as the West is in the midst of a decentralization, freedom seeking quest to change the last damaging centralization/globalization wave.  Cryptocurrencies are the expression of freedom, humanity is raising its consciousness in what so far is a quiet revolution.  Money represents people’s life energy – most are on the losing end of Dollar math, their life’s work stolen incrementally as they earn, borrow, spend, and especially when they just hold dollars.

Speaking of dollars, despite the rest of the world being a despot of failing currencies backed by impossible math, our Dollar compared to the R.O.W. “basket” may be bouncing today, but the monthly dollar chart says to me it is likely going much lower:

A break of that Dollar H&S would send the index down to the 21 region.  Of course the real measurement of the Dollar is against its mirror – Bitcoin.  Gold is a semi-mirror, it too, is going to rally strongly, just not on the scale of Bitcoin.

Bitcoin’s price has been following a new uptrend line since it bottomed.  This is the heavy right upsloping arrow on the chart below.  Note how that line with the former downtrend line formed an X?  If prices gravitate to that new uptrend line on the way out, then prices will be at or near the prior $20k high by about the end of this month.

I updated the chart to reflect a possible bullish wave count that would take us there (you could also count the descent to the $10,400 low as the entire ABC, then wave 1 & 2 finished, we’d be in 3 – but I favor the count shown on the chart).  Of course one can also still count the descent into the $10,400 low as A, and that we’re headed to a B wave top, only to descend to new lows.  I’ll feel better once we get over the old $16,500 high.  That is the next large area of overhead resistance:

My take is that the character of the market just changed again.  I do believe the Bear market has most likely ended – that’s what the heavy volume break of the downtrend line is probably saying, that is unless the B wave is really, really large.  Also, I am counting 5 waves higher again, so I’m thinking we’ve exited the bear, and are now into a new bull (but middle waves can fool, so I’m careful until it proves it).

I’ve made outperforming BTC overall as my goal.  During the big descent I went into many of the Alt-Coins and found enough winners to increase the number of BTC I hold.  Now my strategy is to not give them up as BTC rises.  Thus I am now overweight BTC, and have gone only into the very best performing options in the Alt-Coin space.  Lately for me that has been Ripple (XRP), Stellar Lumens (XLM), and Tron (TRX) among others.  I think all those plays are getting long in the tooth for this wave, I’m seeing upside targets nearing and am beginning to see negative divergences on the charts.  Yesterday when BTC broke the uptrend, most of the tokens sank hard relative to BTC.  The goal is not to lose relative to BTC, but to gain.  Thus when it is heading up, overweight BTC, when correcting, then overweight the smaller, but high performing stuff.

If my wave count on the chart above is correct, then we’ll be able to see and thus to position ourselves in advance of the next move.