Bitcoin 2016 Outlook

Since my last post, $BTC surged to $500, then had a dramatic dump to $300 before climbing back up to $400. In terms of the bigger picture, Bitcoin has broken the 18-month downtrend in October 2015 by surging above multi-month resistance at $300.

@jackfru1t #bitcoin monthly chart looks amazing. Probably be some correction soon, January maybe, before supermoon pic.twitter.com/WH09cP6DOp

— Jack Sparrow (@jackfru1t) December 17, 2015

I hope you're familiar with the crash cycle market structure by now, which I introduced in my 2014 post about market cycle, structure, and manipulation. Based on my interpretation of the crash cycle in Bitcoin, it would seem like we are nearing the end of the cycle, or beginning the new pump cycle. According to Jack, the price action we've seen in BTC over the past year or so places us somewhere at the 'disbelief' stage.

If $500 was the top of a successful test pump...we could be here. #bitcoin pic.twitter.com/sy08n8nUdS

— Jack Sparrow (@jackfru1t) November 5, 2015

Crash Cycle Comparison

If you've been following my blog and twitter account, you'll understand very well that market crash cycles can be found in every corner of the market. With the only similarity between all markets being the human beings behind the money (price), it would be sensible to think that the psychology & emotions behind these humans play a pivotal role in understanding markets and trading.

If we can break this market structure down into 4 easy-to-understand parts, we would come up with something like this:

1. Accumulation 
2. Launchpad 
3. Pump 
4. Dump 

Relating this to Bitcoin , it seems like the year long accumulation period is over, as $BTCUSD broke above major resistance $300 in October 2015. Based on this, I believe we have now moved into the launchpad phase with our current price action raging between $294 and $502.


If Bitcoin continues to be the leading blockchain network, it should become widely regarded and generally accepted as the base currency of other cryptocurrencies. My personal view is that Bitcoin and the blockchain are not going anywhere anytime soon.

In the shorter term, the bitcoin halving happening in Q3 2016 will set the stage for a pump, and for that to happen, MMs must maintain the uptrend structure formed since October 2015. Any breaks below structure will either delay the pump, or lead to another downtrend. Upside targets are $710, $995, and $1163. Downside is $341, $280, $220, $160.

Click here to get a closer look at the crash cycle comparison.

What's next? #Bitcoin | Wall Street Cheat Sheet 3.0 $btcusd pic.twitter.com/9nWXTasxVY

— fractalhedge (@fractalhedge) December 28, 2015

Will BTC/USD break ATH in 2016? #bitcoin

— Alvin Lee (@onemanatatime) January 8, 2016

After the dump from $500, the shockwave and general sideways in the 3-500 range gave time for traders to consolidate their crypto holdings and we have since seen funds flow into altcoins.

Alternative Cryptocurrencies - Are altcoins back?

Are Altcoins back or what? I suppose it pretty much depends on big daddy Bitcoin. #moonsoon pic.twitter.com/nEv75bIFox

— Alvin Lee (@onemanatatime) January 24, 2016

Notice that the altcoin charts in accumulation all look like Bitcoin from 2015 Jan to 2015 Oct. Now that's what I call a bullish chart! Coincidentally, notice that Bitcoin's pump above $300 in Oct'15 was the same time when many altcoins had their final dump and formed a low, before slowly moving up to break out in December/January and later.

2016 Pump Schedule Jan - FCT -> DASH -> ETH Feb - DOGE -> VRC -> VNL Mar - XEM -> XMR Apr - BTC May - Dump it. - MM pic.twitter.com/JT7c5t4Tde

— Alvin Lee (@onemanatatime) January 14, 2016

Here's a look at some charts of the alternative cryptocurrencies that are the leading the charge in this pump. I would consider these to be Tier-1 altcoins. Presenting: Dash, Factom, and king Ethereum.

Dashing $DASH charts. Feels like $BTC in Aug-Sep 2015. @22loops @pterion2910 pic.twitter.com/gKSwvel9FH

— Alvin Lee (@onemanatatime) December 25, 2015

Woah it's been 1 month since the $FCT pump started. Amazing work. @factomproject pic.twitter.com/vna6egY2X5

— Alvin Lee (@onemanatatime) January 24, 2016

MMs painting textbook crash cycle formations all over #altcoins. Pump mode much? $ETH #Ethereum @feudalmondays pic.twitter.com/Ip5hscB0nt

— Alvin Lee (@onemanatatime) January 13, 2016

And you should have noticed about 3 days ago that MMs decided to pump just about every coin out there:

It's easy when everything's just going up.. #altsareback pic.twitter.com/FkptScs4ti

— Alvin Lee (@onemanatatime) January 26, 2016

So here's a few other coins I thought are a good pick for the upcoming altcoin pump. I would consider these to be Tier-2 altcoins, based on technical factors such as trading volume and other fundamental factors like technology, innovation, developer, and community. These include: Monero (XMR), MaidSafe (MAID), VanillaCoin (VNL), and our old buddy DogeCoin (DOGE).

While everybody is busy looking at $ETH and $DASH, panic buy $XMR! @Poloniex pic.twitter.com/MoGAcFaXvg

— Alvin Lee (@onemanatatime) January 23, 2016

#Vanillacoin making moves and moving into Top 10 highest volume on @Poloniex. Got Bags? $VNL $XMR $MAID $DOGE $BLK pic.twitter.com/dEavq0n1J5

— Alvin Lee (@onemanatatime) January 25, 2016

Of all those charts out there, I'm liking $MAID's chances of blowing a 10x from here. 5k on the verge of breaking. pic.twitter.com/A8hIxIEMkp

— Alvin Lee (@onemanatatime) January 26, 2016

Other Tier-3 alternatives would include, DigiByte (DGB), BlackCoin (BLK), VeriCoin (VRC), as well as other "Crypto 2.0" alternatives such as New Economy Movement (XEM), NXT, Lumens (STR), Ripple (XRP), Counterparty (XCP), Bitshares (BTS).

With this, it seems like we're still on schedule for the pump leading up to the 2016 Halving in Q3, and it is likely we will see profits from the BTC pump flow into the altcoins. Did you notice that Altcoin volume has surged since October 2015, in the same way that Bitcoin volume has dramatically increased since August 2015? I'm picturing MMs and bulls beefing up their stacks, getting ready to slaughter the bears once and for all.

The altcoin market is very much different than how it was two years ago. There are now so many choices in the market, with all kinds of different innovations, it's hard to keep track anymore. There's hardly 10 coins that look like they can last another 5 years, while the rest are mostly junk clones with various marketing gimmicks, and I believe many of them will die out; those with little innovation will eventually be weeded out by the stronger coins such as Ethereum, and the market should normalize towards having only 1% of the altcoins dominating 99% of the market. And who knows what's to come in the coming years?

In line with the BTC halving in 2016 Q3, ZCash is launching and they're currently the strongest contender for leading the pump for the altcoin markets then, with many big names backing it. So stay tuned and keep a close eye on this one.

Zcash, an Untraceable Bitcoin Alternative, Launches in Alpha https://t.co/3zZ1jYTR56 #zcash #privacy @zooko pic.twitter.com/odVOf4fyFD

— Alvin Lee (@onemanatatime) January 22, 2016

My advice is to be versatile and stick to coins with good liquidity, and don't get yourself emotionally attached with any particular coins. Remember that at the end of the day, your goal is to grow your number of Bitcoins, or to increase the FIAT value of your portfolio. Markets, they go up, they go down, so always take profits and forget about the "what ifs". Good luck and may the force be with us.

P.S. Don't forget to sell at the end of the pump. Dump it. All of it.

Money Markets

I know the cryptocurrency markets have been going crazy the last couple of weeks/months, but let's not lose track of the money markets that are driving our current economic system. I'll just briefly touch on three major markets: Crude Oil, Gold, and the S&P 500 Index.

Oil has tumbled to a 12-year low of $28 a barrel on the 20th January 2016, amid tensions in the Middle East, and news of excessive supply. Someone said that this is good for the people because we'll have cheaper gas prices, but heck although oil prices have dropped almost 4-fold, my petrol prices here in Singapore are the still the same!


Gold rebounded strongly off $1050/oz, barely keeping structure above the critical psychological $1000 level.

@CryptOrca $GOLD Breakout from 1110 .... so far so good. pic.twitter.com/g76Uha1lFI

— CryptOrca (@CryptOrca) January 26, 2016

Will BTC/GOLD ever reach parity again? $btc $gld

— Alvin Lee (@onemanatatime) January 8, 2016

Since I last mentioned that $SPX was ready for a short back in early November 2015, it topped out at $2109.79 before sliding back down and breaking below the August 25th 2015 low of $1867.61 to form a new low at $1859.33 on January 20th 2016. Doesn't look too good on the $SPX, and this could spell the beginning of yet another major economic crisis.

Well.. you know. $SPX #lennyanalysis #TA pic.twitter.com/JqguHWWzpc

— Alvin Lee (@onemanatatime) January 14, 2016

$SPX longer term average sloping down has not been a good thing that last 2 times we've seen it #TA $spy @dogedradio pic.twitter.com/LSgGb6sPXT

— Kazonomics (@kazonomics) January 24, 2016

To end off, let me just leave you with this classic scenario:

Having a plan is one thing. Sticking to it is another. pic.twitter.com/e6cLoZLXCE

— Tom Dante (@Trader_Dante) January 15, 2016

Related Post: Uptrend Established Bullish Horizon for #Bitcoin: 2016 The "Pre-Halving" Pump (and Dump). $BTCUSD 

Related Post: $400 Bitcoin - Strong Bull Rally Final Target 600s. May the #crystalball be with us. 

Ladies and gentlement, the FOMO is real. $BTCUSD price action has been picking up steam over the last weeks, with a year long accumulation prior to the rise which has broken $318 convincingly.

Goodbye $300 Bitcoin! Hope we won't see you again for a long time. $BTC #Pump #Moon https://t.co/LeQRayAwGM pic.twitter.com/HiecJ2v10v

— Alvin Lee (@onemanatatime) November 2, 2015

Over the last week, we broke above $318 and made a high of $334.67 and consolidated for a moment before breaking above structure again, creating a new 2015 high of $342.06 on 2nd Nov. I went into greater detail on my Twitter post and Tradingview chart last night, saying that this move has legs and can potentially rally to $400 and beyond.

Bitcoin Major Resistance Broken: Short-term Uptrend Confirmation

Since then, we have rallied past the 340s and $BTCUSD (Bitstamp) is currently trading at yet another new 2015 high of $396. We're currently seeing the bulls and bears battle it out within the 386-396 zone.

Edit: Bitcoin has now broken $400 and is trading at $406.

Bitcoin Major Resistance Broken: Short-term Uptrend Confirmation - Trading at 400+

So what's the cause of this insane bitcoin price rise? There's been positive news about bitcoin going on for a few months now, mostly revolving around the "blockchain not bitcoin" idea. Some news include:

• Banks experimenting with Blockchain
• Gemini - $240s - Oct 8th
• Economist cover - $318 - Oct 31st

Do you know what blockchain technology is? It could make the future a very different place https://t.co/5TCBtnhG51 pic.twitter.com/NkF6xgZKZi

— The Economist (@TheEconomist) November 1, 2015

As I mentioned in my previous blog post: "this marks the beginning of a new uptrend as we head into 2016, with news outlets ready to paint a bullish picture as the market requires new buyers to get into pump mode."

I'm sure there's still plenty of news pieces in store, ready to be unleashed at appropriate times over mass media channels in the next months to attract new money into the bitcoin economy.

Looking forward to next week's weekly candle and seeing this Triple EMA turn green. Everything has been looking good since re-entering bitcoin in August and with the crazy price action since breaking out of $240.

Will have my sight set on $600+ if 420/450/480 levels are blown through. 657/670 will be my final targets for this run and I may be looking for a short into the 400s before loading up again. Trade safe, and may the power of the #crystalball be with us.

Bullish Bitcoin: Weekly Triple-EMA Turning Green - First Time Since August 2014

I think we're gonna see the 2015 high broken a few more times, so remember, the trend is your friend. Get yourself in a favourable position during the bitcoin rally, and leverage this opportunity on OKCoin, BitMEX, or Bitfinex for margin trading up to 100x.

$BTCUSD Made New Highs Again! Capitalize on Bitcoin uptrend with 100x Futures @BitMEXdotcom https://t.co/2dmNMgcC1q pic.twitter.com/4CM8kqlDdp

— Alvin Lee (@onemanatatime) November 2, 2015

On a separate note, the S&P 500 ($SPX) looks almost ready for a short entry. I've been eyeing this one for a while now.

S&P 500 Index ($SPX) Daily Chart - Looking for a short position

S&P 500 Index ($SPX) Weekly Chart - Support & Resistance Triple EMA

Watching the Triple EMA on the weekly closely.

Capitalize on this with Bit4x, 1Broker, and SimpleFX, and trade in global capital markets stocks indices forex using bitcoins.


References:

UPDATE: Bitcoin In Uptrend, Breaks Major Resistance $318, $400 & Beyond https://t.co/QuFO4UIR7F $BTCUSD @tradingview pic.twitter.com/s4TKQ2p4vT

— Alvin Lee (@onemanatatime) November 2, 2015

Previous Blog Post: Uptrend Established Bullish Horizon for #Bitcoin: 2016 The "Pre-Halving" Pump (and Dump). $BTCUSD



Share your thoughts and questions in the comments section below, or send me a direct email by filling out the form at the bottom of the page.

If you still don't know what Quarkcoin (QRK) is, Jason explains it pretty well in his recent video below.

Since Bill Still talked about Quark in his recent video, it has exploded within the Bitcoin community and has received huge critism, with many dismissing it as a "scamcoin" or a "pump and dump" scheme. See the Reddit discussions below for more information.

Reddit: Are we being mislead by Quarkcoin Propaganda? 
Reddit: Pump and Dump scheme

nice to see someone else hasn't lost their fucking mind. http://t.co/IrMJjUG094 attacking #quark and the fraud it's built on. #nicejob
— BitcoinSachs (@BitcoinSachs) December 2, 2013

Apart from Quark being more secure by using 6 different hashing algorithms, I have yet to be able to find any substantial evidence that this coin is "not a scam" or "better" than most other alts out there. The conversations about Quark have exploded in Reddit over the last few days, and the most asked question is regarding the issue of 98.9% of the Quarks being already mined out.

In fact, almost everyone in the Bitcoin community has been calling Quark a scam, and saying that the heavily vested (Max Keiser & Bill Still) are overhyping a premined coin for their own profits. However, someone like Bill Still or Max Keiser pumping a "useless" coin solely for their own benefits seems like a stupid thing to do. In my opinion, there has to be a better reason as to why they really believe so!

Also, I want to emphasize that Quarks were NOT pre-mined! Instead, the 98% of Quarks that have already been mined were mined by a community of ~100 or so people, who in the case of Quark, will be the central nodes of distribution for Quarks. This then leads to the more important question, how can the Quarks held by 100 people be fairly distributed among the rest of the new adopters?

This was covered in depth in a few discussions that I found, but there is still no concrete answer to the question posed.

1. Quark Forum: Decentralization and Supply of Quark
2. Reddit Discussion: How to answer the Premining question
3. Quark Forum: Question Pre-Mining

The closest answer we have lies in Quark's design. QRK is designed in a way that only CPU mining is efficient. Quark is being mined during a short period of time, which discourages GPU or ASIC miners and keeps the coin fair since Developing ASIC miners takes considerable time and man power. Quarks are mostly mined by early miners, and have been well distributed before the value of this coin goes high like Bitcoin. So there are no ASIC miners and hence we don't have a case where a minority of privileged people mining using specialized hardware gain big profits. From this point of view, Quark is more decentralized since virtually everyone (rather than certain groups of people with special hardware) can mine it; the likelihood of monopolization is smaller.

[Source: Quark Forum: Decentralization and Supply of Quark, Quark Forum: Question Pre-Mining]

Secondly, from the official information posted on Cryptocointalk, it is interesting to note that the supply of QRK is inflationary, wtih a total of 247 million QRK will be mined in ~ 6 months, after that ~ 1 million QRK p.a. (~ 0.5% p.a inflation). This is interesting because it is a completely opposite take on Bitcoin's limited supply. And this means that the value of QRK is deflationary.

Thirdly, Quarkcoin also brings with it several technical benefits when you compare it to Bitcoin, as pointed out by user majormax (see the discussion here). Some of them are listed below:

1. Secure and different Hashing algorithm. 9 rounds of hashing from 6 hashing functions, rather than a single Hash function, which most coins use. Although the single hash function is considered sufficient at present, the multiple hash gives a further layer of security against future unknowns.
2. Rapid block generation times. The block generation time for QRK is 30 seconds against 10 minutes for BTC.
3. A rapid decrease in the Mining Subsidy. This increases scarcity at a greater rate: the newly mined coins available for sale do not affect market price as much as other alternative currencies.

I have also compiled some Quarkcoin related news, which I recommed you watch/read before investing in Quark.

1. http://www.reddit.com/r/Bitcoin/comments/1rvcpd/bill_still_to_talk_about_cryptos_on_the_max/
2. http://dailysilverupdate.com/blog/2013/12/max-keiser-bill-still-on-bitcoin-litecoin-quarkcoin-prices/
3. http://www.youtube.com/watch?v=7daKwO3cgiU
4. http://www.reddit.com/r/Bitcoin/comments/1rwfni/shame_on_you_bill_still_you_hate_on_bitcoin_for_2/
5. http://www.reddit.com/r/Bitcoin/comments/1rr4eg/keiser_promoting_another_scamcoin_pump_and_dump/
6. http://www.reddit.com/r/QuarkCoin/comments/1rxcs4/stop_pulling_out_of_quark_there_is_nothing_to/

After doing this preliminary research, I still have no clue as to whether or not Quark will be here to stay. On the other hand, Quarks will soon experience the Keiser Effect, and I'm not going to miss this boat. I will continue to research into Quark, and buy more (as the price decreases, just my prediction) until it rises after the 19th of December, when Keiser Report airs. Don't forget to vote on my Quark poll on the right column! Also, please tell me what you think in the comments section. Whether not you agree or disagree with me, I just want to know what you think, so shoot me!

Another coin to watch is Zetacoin, which also has an infinitely inflationary supply. Read up more about Zetacoin by clicking here. Also, watch out for Bitcoinsachs' upcoming blog post or follow his Twitter account @BitcoinSachs. Might cover that over the weekend. Stay tuned!