The Litepresence Report on Cryptocurrency

[fatjohn]

Anyone who thinks this is going to be a fakeout should take a minute on bitcoinwisdom scroll out back to fake march and june rallies and compare the volume.
Huobi, OKCoin and to a lesser extent Kraken and Bitstamp are all seeing significantly more volume during this run than during those fakes.

Now back to the short term. Rising support is now at 2173 on OKCoin. A test of 2192 has also occurred twice. The price might stabilize the coming hours just above this level and test them a bit. I'll stay bull as long as rising support is not broken. Rising resistance is at 2450, lots of upside to be had.

 

[fatjohn]

Ok it's game time, let's see if supports holds. Looking ok so far.

This might be a good moment to get in with a close stop loss.

 

[fatjohn]

There are things to like and things not to like about this test.
I don't like that the price actually breached the trendline with a couple of yuan.
I do like the volume though and the fact that it is now already trading at 2206.
Stay strong, stay long.

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[fatjohn]

So there's a 25 dollar discrepancy between china and the US now. Really? Is there no arbitrage at all?

 

[presence]

 

[amonasro]

Ok it's game time, let's see if supports holds. Looking ok so far.

This might be a good moment to get in with a close stop loss.

I personally would wait for the breakout to go long here. Although I am bullish, a "back up to the creek" may happen, bringing the market back to test the previous $280-310 resistance zone before resuming its journey upwards. No doubt the bears will pile in once they see major support (or what they think is) near $300 broken. This automatic reaction is healthy market structure and usually goes to the preliminary supply area, of which there are two in this rally, one at $295 and another at $275. The shallower this back up and the lower the relative volume, the more bullish.

Here we go with another Wyckoff analogy, but they are so good... In his tape reading course he said that the market is like a sponge, and sellers are link ink dripping from an inkwell onto the sponge. At some point the sponge will become full and the ink will spill out onto the table. He's referring to the absorptive capabilities of the market, i.e. it's ability to withstand selling, especially after an uptrend where demand is reduced and lots of weak hands hold the stock (their tendency is to sell once prices begin to fall against them). This reaction wave of selling temporarily discourages new buying and shakes out a lot of top buyers with big losses.

Zooming in to the 2h scale, if the market breaches the low of the automatic rally off the buying climax ($334-314) that is a sign of weakness that sellers are present en masse and may tip off the selling: the sponge becomes full of ink.

 

[fatjohn]

I personally would wait for the breakout to go long here. Although I am bullish, a "back up to the creek" may happen, bringing the market back to test the previous $280-310 resistance zone before resuming its journey upwards. No doubt the bears will pile in once they see major support (or what they think is) near $300 broken. This automatic reaction is healthy market structure and usually goes to the preliminary supply area, of which there are two in this rally, one at $295 and another at $275. The shallower this back up and the lower the relative volume, the more bullish.

Here we go with another Wyckoff analogy, but they are so good... In his tape reading course he said that the market is like a sponge, and sellers are link ink dripping from an inkwell onto the sponge. At some point the sponge will become full and the ink will spill out onto the table. He's referring to the absorptive capabilities of the market, i.e. it's ability to withstand selling, especially after an uptrend where demand is reduced and lots of weak hands hold the stock (their tendency is to sell once prices begin to fall against them). This reaction wave of selling temporarily discourages new buying and shakes out a lot of top buyers with big losses.

Zooming in to the 2h scale, if the market breaches the low of the automatic rally off the buying climax ($334-314) that is a sign of weakness that sellers are present en masse and may tip off the selling: the sponge becomes full of ink.

Good analogy. FWIW I got stopped out since i was closing that trendline very closely. Volume is entirely gone from OKCoin. Huobi has a bit less action. While Bitstamp is still defending its version of the upward trendline. I don't think that one will hold so I'm also sitting idle now until a break forms.

So according to you, low volume is a good thing now?

 

[amonasro]

Good analogy. FWIW I got stopped out since i was closing that trendline very closely. Volume is entirely gone from OKCoin. Huobi has a bit less action. While Bitstamp is still defending its version of the upward trendline. I don't think that one will hold so I'm also sitting idle now until a break forms.

So according to you, low volume is a good thing now?

Volume can be low or high depending on context. The market can rise or fall on high or low volume. I'm seeing high red volume come in now, the sellers have arrived. Lower green volume around those big red bars is bearish at the top of a large uptrend where the market is vulnerable to selling and low demand. Volume declined on OKC but is picking back up.

I'm also hesitant to short in case it bounces strongly, but if the bounce is a lower high say, on the 2/4/6h chart with declining volume and narrowing candles (indicative of active selling over the market), that would be a good short entry if you wanted to play the downswing. Just put a stop a couple points above in case the bulls charge back. I'm guessing that Stamp will bounce back to resistance at ~315-320. OKC probably has a lot of leveraged longs holding on for dear life and the dip buyers are still active, so it will probably recover slightly. If the recovery is weak and fails to keep its head above water and make higher highs, this is bearish, meaning the market is having a tough time holding this price range with all the pent up selling energy being released, and that supply is overcoming demand.

 

[PaulConventionWV]

So there's a 25 dollar discrepancy between china and the US now. Really? Is there no arbitrage at all?

No, there's plenty of arbitrage. That's what you call that discrepancy.

 

[fatjohn]

No, there's plenty of arbitrage. That's what you call that discrepancy.

I thought arbitrage is the act of taking advantage of the difference.
Anyway aside from definitions, is no one selling on china and buying in the US and converting there yuan to dollars? I know there's a certain loss in this process but I would not assume that its 25 bucks.

Anyway, I'm still on the sidelines here. There's a wedge forming in my opinion, which is likely to break to the downside to perhaps test the 1950 level.



Looking for a hint of where the market will go by either breaking 2205 or 2145.

 

[presence]

I thought arbitrage is the act of taking advantage of the difference.

I tend to use it that way.

Anyway... the issue is one of viscocity of money.

It displays that fiat is more viscous than crypto.

the ltcbtc at both cny and usd exchanges is and has stayed at parity all week through this bull run. So there ARE many people playing the ltcbtc arbitrage between the cny and usd exchanges.

However, as noted, the btcusd has stayed 15%+ under btccny and ltcusd likewise under ltccny.

So the chinese are spending yaun on crypto. That is a process that is "happening" like flowing water.

the ability and willingness to hold and move usd onto exchanges at the moment is simply not moving as fast.

So theres "discrepency" and those few willing and positioned to play the arbitrage through fiat movement fx channels act as a pressure regulator between exchanges; its blowing off but only so much at a time.

The viscosity of a financial transaction is related to the difficulty, the distance, the cost and the time that is needed to perform that transaction. Most of the financial transactions have an extremely low viscosity, dangerously low. As shown above, many transactions occur by an
a priori win-win attitude.

The purchase of a house has a very high viscosity, as well by its fixed location, its time schedule, as by the notary costs. It allows one to take a financial decision, not as a speculator or a predator, but as an investor. When a house has been bought too cheap, the buyer will get the visit of a tax controller. So, black money also will be limited. In other words, there is a reasonably good control on this transparent transaction. For some transactions, especially those that affect the economy of a state and so their nationals, the governments can find ways to increase the viscosity of some transactions
They can introduce supplementary difficulties by asking people to fly over when they operate for high amounts of money, introduce investigations regarding the honesty of the transaction, waiting times before a transaction is allowed to take place, and finally, introduce a large premium for unfriendly transactions. Especially for financial transactions that can disrupt local economies, like the money market of small economies.

http://www.edscuola.eu/wordpress/?wpfb_dl=879




Anybody that is arbitraging cny to usd via crypto exchanges is not moving their bank through the process. They need to be holding cny and usd and btc at all times to be effectively positioned to handle fx-crypto arbitrage. So you have to have money involved that's "not making money", but on hand, to strategically tri currency fx-crypto arb. Hence, how it can get out of hand, its work, and the people that do fx-crypto arb are working it.

The limiter in the process is moving fiat from the chinese exchanges back to the usd exchanges. How do you do it? Wire? One has to be willing to be hold fiat for the duration of the transfer while BTC is bulling at a wild daily rate.

Much easier to panic hodl BTC

The tools for tuning the financial viscosity are the location of the transaction, the time needed for an approval, and the premium to be paid for that transaction. These tools can successfully be used to strongly augment the viscosity of financial transactions, and so, avoid unwanted disruptions.

^^^ none of that exists on ltcbtc between huobi and btc-e; hence parity.


and from btce-e terms:

We don't accept international wire transfers from US Citizens or from US Banks
All transfers from US Citizens or US Bank will be refused by bank

 

[presence]

OKCoin LTCCNY making a push at 26;

30k LTC wall preventing the climb

If 26 falls there's good possibility of moon time again.

 

[presence]

26.380000000000000000000

 

[presence]

 

[PaulConventionWV]

I thought arbitrage is the act of taking advantage of the difference.

Okay, good point, but you needed to be more clear about that.

Anyway aside from definitions, is no one selling on china and buying in the US and converting there yuan to dollars? I know there's a certain loss in this process but I would not assume that its 25 bucks.

As for the idea that you could actually arbitrage your way to wealth, the gap still isn't big enough to really account for the costs of trading and moving money from exchange to exchange with the time it takes just to transfer the money, which makes it far more risky.

Anyway, I'm still on the sidelines here. There's a wedge forming in my opinion, which is likely to break to the downside to perhaps test the 1950 level.



Looking for a hint of where the market will go by either breaking 2205 or 2145.

Let's see how your prediction of breaking 2205 holds up. We're at 2270 currently...

I actually bought a small long position at $330 and have my finger on the sell trigger as soon as I see signs of weakness, at which point I will consider a short followed by a long-term long.

 

[PaulConventionWV]

//

 

[fatjohn]

Ugh well it broke on the other side. I went long as soon as it happened but got stopped out in an unexpectedly strong correction (US and Europe had some strange action during that Chinese breakout) then traded short for a little (on emotions, tss idiot me). Painful 24 hours. Lost more than half the gains I made in this upswing (counting in btc)

Now I am long again but not super comfortable, it is trading close to a trendline I am watching atm. I hope it holds, I am currently seeing lots of volume with large players on the buy side. (Oh and a welcome violent move upwards as I write, a little bit more comfortable now going to set some stops and sleep a bit)

So this channel could hold for a long while but somewhere along the way I think we will revisit the 21 day moving average. This was often done during the previous bubbles. This might mean a retraction from new highs (3000 ish?) to the previous highs (2300) timing points to the 9th of november. (theory is 21 day moving average will cross the trendline which has proven to give the most resistance and support so far. The one that I was originally waiting for a break to the downside. Anyway will post a picture after my nap.

 

[amonasro]

I actually bought a small long position at $330 and have my finger on the sell trigger as soon as I see signs of weakness, at which point I will consider a short followed by a long-term long.

I am in a similar position. Long both BTC and LTC, but with a breakeven stop loss. I'm becoming cautiously optimistic.

Every bone in my trader body wanted to be a bear over the weekend, but every time the market paused to gauge selling, there was little to none. I'm seeing the same thing today... after the paltry selling wave passes, the market gets dull and the next little wave of demand pushes it up. Welcome to the bull market, I guess. And not to mention the 20k powder keg of shorts on Finex

 

[muh_roads]

Setting stop losses here I think is madness with all this volatility. Be your own manual stop loss. China is buying. China is buying. The entire month of November could be very golden.

 

[muh_roads]

Don't short an uptrend. The more contracts people try to short, the more rocket fuel we will get as OKC hunts for the liquidations.

https://www.okcoin.com/future/futureTop.do?type=1&symbol=0