The probability of losing funds through investing or trading to the point where it is no longer possible to recover the losses is termed as the risk of ruin. The “probability of ruin” is as high or higher than the probability of booking a profitable trade. However, it gets interesting when you think of recovering from losses. Since the risk of ruin is not exactly linear, to recover from a 10% loss you need 11.11% profits. In crypto trading, it is an even bigger challenge, as you add the volatility of cryptocurrency prices to the inherent risk of ruin.
Though FUD has subsided, and the market is what smart money wanted it to be. Crypto traders risk going from a 10% loss to complete ruin, and that is a slippery slope. In the past 3 years, since the historic bull run, if you have made losses because of bad timing or unfortunate trading decisions, you may have an opportunity to make up for your losses in 2020.
With the improving regulatory stance, there are hopes for a Bitcoin ETF. With bullish sentiments, traders are buying above $11.3k and over 88% HODLers are sitting on unrealized profits. Based on moving PNL charts by Whalemaps, profits are 3 times that of losses in the current phase of the market cycle.
Smart money is pouring in despite the risk of ruin and the low volatility in Bitcoin prices may be key to this institutional investment. Bitcoin reserves on exchanges are at their lowest in the past 180 days and this poses as an excellent opportunity to book profits at reduced risk. The risk of ruin cannot be entirely eliminated and losses cannot be recovered in a few trades, however, the current market with its low volatility minimize risk exposure and offer a come back to retail traders.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 10,878.98.
The projected upper bound is: 13,027.63.
The projected lower bound is: 11,522.18.
The projected closing price is: 12,274.91.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 88.5089. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 70.42. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 75 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 207.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 14 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed up 368.740 at 12,270.000. Volume was 86% below average (consolidating) and Bollinger Bands were 11% wider than normal.
Open High Low Close Volume 11,907.710 12,316.130 11,881.550 12,270.000 97,408
Technical Outlook Short Term: Overbought Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 11,583.20 10,839.16 9,861.77 Volatility: 40 44 55 Volume: 387,694 575,314 545,773
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX BTC= is currently 24.4% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect volume flowing into and out of BTC= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on BTC= and have had this outlook for the last 24 periods. Our momentum oscillator is currently indicating that BTC= is currently in an overbought condition.