11-5-2015, Bitcoin market update, market pullback after FOMO + parabolic.
You gotta give it to the bulls, moving from previous high around 314 to 500. That is impressive in only 3 days. I got notified for an update. I updated some of my thoughts the last few days but it got buried so fast lol. I'll pull in all the updates and put it here.
During an up move that goes parabolic, throw away your TA, chart, resistance and support lines. They are useless. When market is relatively "reasonable", those tools have predictive features. Imagine the daily weather prediction that you see. They are accurate most of the time, until fucking Hurricane Patricia comes in and throw off everything. When market is unreasonable, these are the things to keep in mind.
Is the market making higher high? what about higher low? Volatility is so great that I have to look at the 1hr chart. We have made a lower high and a lower low so far. That is bearish in the short term. Could be another pullback in the making for dip buyers, but dip buyers have been consistently buying the dips without making lower lows. This makes me believe that we have more pullbacks ahead.
Is the sentiment FOMO + parabolic pattern? Judging by the new comers coming into the daily threads? Yes. The Eiffel tower pattern come to mind when market FOMO and goes parabolic. Effectively, the price action follows the edge of the tower, going up parabolic and coming down relatively the same way. I posted this idea about 20hrs ago @ 3000CNY or so on here and twitter You can read up on the Eiffel tower pattern that I've done in the past.
Take a look at the pattern the last time we went FOMO and parabolic, it happened on Nov14, 2014, almost a year from today. Eiffel tower on NOV18, 2014, couldn't find the reddit post which i've written here, relevant blog link.