Decision 2014

Alright everyone. I want your opinion on the volume of this broader period chart. I realize there are complexities with gox issues and other exchanges. While relevant (that analysis is still forthcoming), my early indication is that it may not be very significant historically.

I’ve stared at a good amount of charts and tape, and between all the exchanges, something doesn’t feel right. This isn’t Christmas on the S&P here. We’re testing critical levels on both sides but seeing extremely low market participation. Huge orders accounting for light daily volumes is not your average Dick and Harry accepting BTC value at $970.

It appears we are experiencing major market making activity. It may only be this visible because of the low volume. After ramping above $1000, we’ve seen modest weekly distributions of 400K takes us down in excess of $400. Can you imagine what a 800K distribution would do, or something even more extreme in the range? BTC used to do that volume on tight spreads. That pattern would not repeat today.

A pattern likely to repeat, and one that appears due, is some high volume on the all time range. We haven’t even sniffed at these levels for over 6 months. After a major bull move, you’d expect heavy distribution volumes even more. Those strong hands are watching, and they are strong with ACBs closer to 10 and 100 than 1000. Remember, where were we one year ago folks? Have we seen any non-spec buying above 500 to this point?

I wouldn’t bet against BTC (until it’s confirmed), but my bias is bearish given this volume analysis. I won’t pretend to know what is coming, but I’ll be hopping on it either way when the broader market returns.

Update 03/01/14

Well, Mt. Gox is officially bankrupt. That news took us all the way down to $93.00 before the plug was pulled on trade there. Other exchanges stabilized higher around $500 but we’ll see what’s in store for them as well as we go forward. You can see a chart of the Gox crash below, or, the original by clicking here.

decision-2014-bitcoin-gox-result

 

Aurie Philipchuk

Managing Partner @Tractai. Blockchain enthusiast. Jack of all trades. Interested in building the new generation of great companies? Let's connect.

 

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