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Bitcoin - Correction Still Not Over

Sep. 09, 2019 1:57 PM ETBitcoin USD (BTC-USD) Crypto58 Comments
Florian Grummes profile picture
Florian Grummes


  • Bitcoin has been consolidating on high levels.
  • Overbought setup has been completely neutralized.
  • Triangle breakout is coming closer.
  • According to seasonality the fourth quarter should be very strong.

Bitcoin (BTC-USD) has been consolidating for more than two and a half month now. Generally, the set up is still bullish while the overbought situation has been neutralized. A move out of the triangle is coming closer. Even though lower prices might be coming first the usually strong fourth quarter should bring much higher bitcoin prices rather soon.

Time to buy a small starter position and arrange enough cash at the sidelines to buy any larger dip!


Since peaking at US$13,887 on June 26th, 2019, Bitcoin (BTC-USD) has been moving sideways in the range of US$9,200 to US$12,000 in the last two and a half months. In my analysis from July 14, 2019, as well as in my analysis from August 15, 2019, I had warned of the summer doldrums and a continuation of the grueling sideways phase including lower prices. However, the July 28th low at just under US$9,100 has not yet been undercut. Therefore, the open gap in the Bitcoin Futures at US$8,500 has therefore not yet been closed. At the same time though, the sideways movement has completely neutralized the overbought situation in which Bitcoin was in late June. In this respect, the correction so far took place primarily over the time axis (more than 10 weeks) and less via the price (-34%)!

Technical Analysis For Bitcoin

Source: Tradingview

On the weekly chart, the overall extremely bullish setup remains obvious. Bitcoin (BTC-USD) has risen from US$0.008 to nearly US$20,000 in just under 10 years, far outperforming all other asset classes. It is very likely that this unique performance will continue in the coming years.

As well, the consolidation of the past twelve weeks underscores the potentially bullish continuation setup, because the previous low at US$9,100 was so far all the bears were able to achieve. Any investor who wanted

This article was written by

Florian Grummes profile picture
Florian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 25 years of experience in financial markets. Via Midas Touch Consulting he is publishing weekly gold, silver, bitcoin & cryptocurrency analysis for his numerous international readers. Florian is well known for combining technical, fundamental and sentiment analysis into one often accurate conclusion about the markets. www.midastouch-consulting.com

Analyst’s Disclosure: I am/we are long BTC-USD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (58)

lorddarley profile picture
Nice call, @Florian Grummes

On September 9, you pointed out that the Bitcoin gap at $8,500 had not been filled. So here we are on September 25, and we are certainly getting our fill.

I never gave much credence to technical analysis, but you have made me a believer, at least when you are forecasting.

Florian Grummes profile picture
Thank you very much...
alphaseek2018 profile picture
Only dummies buy GBTC for bitcoin exposure. Why pay such a high premium for something that you can easily buy from an exchange like Coinbase or Gemini?!
jimbo162 profile picture
It's the only real option from my IRA account to invest in bitcoin, at this time.
alphaseek2018 profile picture
You don’t need to have it in an IRA. Buy and hold in a taxable account.
jimbo162 profile picture
I pull funds out of my taxable account, and buy actual crypto. The premium is way too high for GBTC, it is not a good way to invest in bitcoin IMHO
There are a couple of bitcoin etf applications before the SEC, to be decided on by the middle of next month. What are your thoughts on that? If either is approved, I would think that GBTC (which I held in the past) will be taken to the woodshed due to its high management fee.
Florian Grummes profile picture
Here is our latest crypto/bitcoin chart-book: www.midastouch-consulting.com/...
E-gold lasted a lot longer than Bitcoin has been around.
It was ultimately shutdown by the US government.
Why do you think it’s any different this time around?
Return after buying $10 worth of bitcoin everyday:
1 year - 55%
2 year - 32%
3 year - 235%
4 year - 654%

Return after buying $10 worth of gold everyday:
1 year - 5%
2 year - 5%
3 year - 6%
4 year - 8%
Nathan Gallo profile picture
Because E-gold was centralized with a single point of failure, the company running it. Bitcoin is decentralized, it can't be shut down
alphaseek2018 profile picture
Btc will surpass $20k year end. For the bears keep dreaming for $3k. We will have the last laugh lol
Agree there but we still have to get through this correction.
alphaseek2018 profile picture
A lot of bears are hoping to go long bitcoin at 6k, or even lower at $3k. Too bad they missed their chance back in late 2018. Now all they do is bash it hoping to buy low. Not gonna happen! Pay up!!!
The writer mentions it bottoming right here and then taking off.I don't see it going much below 8000 if there is a correction.I'm starting a small position right at these levels in case this is the bottom here.No way will it go to 6 or 3 K now IMHO.
alphaseek2018 profile picture
Where’s the doomsayers calling for a new btc bear market???
jimbo162 profile picture
It has become kinda obvious for 2 weeks now at about 3:28 (half an hour) before the market closes BTC gets hammered down sharply? It would appear mr wallstreet is playing with bitcoin on a regular basis....just a casual observance.
Time coincides with Barry Silbert’s algo trades
He’s definitely the king of pink sheet trash
Thank you for this excellent analysis!Made a nice profit on impulsive wave one from 4000 to 13000..I've been watching this corrective wave two and also felt below 8,000 was a good entry.It's pretty strong above 9000, so I think I will nibble in below 10,000 and add a lot more at 8500 or below.
10 Sep. 2019
Going down, down, down!!

this could be interesting if they mention somthing on the new phones like Samsung has to hold keys....might cause a big jump even if they mention Bitcoin. fingers crossed
This is what everyone said at 3800. Market sentiment is just like before our last rally in spring. Odds are well see a new one begin. The new bottom was made clear. Close your shorts and go long bud
Sebastian Rogerson profile picture
this feels like November 2018. Nobkdy thought that $5800 would break then it did. This time everyone is too confident that 9k will hold
Mikhail_Bitcoinovich profile picture
Florian, this is one of the best articles I have seen on bitcoin on Seeking Alpha. You cover the asset from a very wide range of perspectives, the information you provide is well researched, and comprehensive, and your advise is reasonable. To the many of you who love to follow every bitcoin-related article to express why bitcoin is a scam and why it will go to zero, I challenge you to read this excellent article with an open mind, and come up with a reasonable, fact-based reason why you should not have 1% of your portfolio in bitcoin.
TheLawgicaLInvestor profile picture
Lmfao BTC hodlers are starting to sound desperate; now the mantra is everyone’s portfolio should contain 1% of Cryptos and there is not one fact-based reason for a person to not act as such. This is comical.

Does the fact that BTC contravenes the interests of all the institutions that underpin the current monetary system not matter to you at all? I would say that is reason enough to not speculate on BTC at these prices levels. Not to mention that derivatives have made it possible for those institutions to manipulate the spot price of BTC. I would bet in favor of established institutions and their interests, over the pipe dreams of the People at large as manifested in a 10 page white paper.

But I guess I just don’t sufficiently understand the “revolutionary” vision of crypto zealots.
@TheLawgicaLInvestor Hey, long time no see. I have not seen you around since the start of 2019, when you said Bitcoin would fall from around 3k to zero was it? Now I am up 200% on my Bitcoin since then. I told you it back then and I'll tell you it again. Instead of spending your time bashing something you have no understanding of you should have spent that time educating yourself. If you had listened you too could have tripled your money over the last months. But from what I recall, neither economics or tech are your strong sides. Remember when you made this statement

"Generally speaking, the price of something doubles because the demand doubles while supply remains constant, or because supply is reduced by 200% while demand remains constant. The halving does neither of those. The halving is therefore not a catalyst for BTC going parabolic"

That just cracked me up man, you are one funny guy. Good times, nice to see you are back again always fun to read your wild interpretations of how economics and tech works, just too bad you did not listen when I told you back in February and March 2019 that Bitcoin's bottom is around 3k and it will start going up from april or may 2019. Could have made a few hundred percentage. Glad your back :)
TheLawgicaLInvestor profile picture
lmfao I never asserted anything about btc’s near time price one way or another. Although I did say BTC won’t ever make new highs, and I haven’t been proven wrong yet.

Good for you being up 200 percent on your speculation, do you want a pat on the back? I earned 115k in dividends during that time frame; I have enough capital to not have to speculate on btc.
jimbo162 profile picture
I still think a correction to the range of $7600-8600 is wishful thinking but can only say i will add. I am concerned a bit with BAKKT going live in a couple weeks....prices either explode higher or get manipulated to this level (or worse). Don't forget what happened when CME futures started trading 12/15/17. Personally i don't like futures trading but it is what it is. At least BAKKT is supposedly settled in actual bitcoin....this remains to be seen. But don't kid yourself, bitcoin is manipulated both sides of the trade each and every day.
Mikhail_Bitcoinovich profile picture
Even though I've been saying since June that a correction to $8,500 is likely before the next leg up, I'm with Jimbo on this, and I'm not holding my breath waiting for that correction. I am fully invested up to my target bitcoin allocation right now.

If you are one of those who is banking a substantial portion of your portfolio's crypto allocation on trying to catch this dip, you might be interested in my reasons for why I'm not waiting for the dip, even though I believe the dip is likely to happen.

But first, why $8,500? Because $8,500 represents the 50% retracement from December's $3,150 low to June's $13,850 high, and because the $8,350-8,500 zone has represented a resistance or a support level many times in the last two years. This level was a resistance in November 2017, alternating support and resistance between April and May 2018, a strong resistance in July 2018, and more recently, a resistance again in May 2019.

Looking at how similar triangles have resolved in the past for bitcoin, I found 10 fractals with a similar price action to what we have now (strong bullish run up, followed by a long triangular consolidation) that resolved sharply to the downside. In almost every case, the sharp drop was also followed by a quick V-shape recovery and the next bull leg of the market.

So, why am I not waiting for this dip? There are several reasons for this: (1) it's very difficult to catch the low point of a V-shape recovery, especially in a market that operates 24/7; (2) I don't want to risk missing out on the first leg of the recovery because I was greedy trying to catch the bottom of the dip; (3) I already re-invested at an average re-entry price of about $11,000 what I sold in June at $13,700, and I'm happy with that trade; (4) technical analysis and fractals work fabulously... until they don't; and (5) there is a growing number of mainstream investors who have taken the approach of investing a constant amount of fiat in bitcoin every month, every week, or with every paycheck. This growing group of people believe in the future of bitcoin, but does not want to be stuck looking at the price of bitcoin every hour. They have wisely decided that they were not going to try to time the market, but instead simply let the beauty of Dollar-Cost-Averaging work for them. This group even has its own hashtag movement (#stackingsats) and its influence is, in my opinion, starting to be felt by the market, creating a constant and growing underlying buying pressure. This may explain why, instead of becoming a sharper correction, this latest consolidation stretched out horizontally, as the author describes.

So for me, because I believe strongly that bitcoin will have a very bright future, I do not believe that the opportunity (read: greed) of trying to catch the bottom of what will likely be bitcoin's last foray ever into 4-digit prices is worth the risk of missing even a portion of this bull market's next leg up.
jimbo162 profile picture
So you are saying Michael you are not a trader.....finding an accurate crystal ball is much easier said than done. Good advise. I have said for many years if there is a even a 2% chance bitcoin goes to a million (google John McAfee) i want some.
This is fool’s gold. SEC needs to come down hard on this useless scam.
Mikhail_Bitcoinovich profile picture
Excellent, highly enlightened comment, DeejL! The information you provide is insightful, profoundly useful to your fellow investors, and demonstrates that you hold a unique and deep knowledge of bitcoin. Your never-before-provided perspective on recommended SEC actions and your conclusion regarding what bitcoin is are both jaw-droppingly novel, forward-thinking, and comprehensive. I'm very impressed!
How would the SEC come down hard on this useless scam?
10 Sep. 2019
Looks like it’s taking a pounding today. Someone’s cashing out! Yesterday I read about an investigation into a single BTC transaction worth a billion dollars. Who is doing that?
Nathan Gallo profile picture
I wouldn't cling too close to the hope that the gap will fill. There's a ton of open gaps in bitcoins history, this is the nature of using a Monday to Friday market to look at a 24/7 market
The gaps in Bitcoin are due to the illiquidity of Bitcoin as well as the massive amount of algos playing it. It's still a heavily manipulated and inorganic market. Value buyers will never step in unless Bitcoin figures out a way to reward it's holders.
Nathan Gallo profile picture
Everything you said is wrong. The gaps are from the futures market which is only open Monday through Friday closing at one price, while bitcoin keeps trading over the weekend and opens at a different price on Monday.

I would have thought your understanding would be better than this with how obsessively you follow bitcoin
Name all the different types of gaps
Bitcoin's fine as long as Greater Fool hangs around.
you will see in time.
Mikhail_Bitcoinovich profile picture
... and then there is of course the Greatest Fool, who crouches there on the edge of the arena, year after year, decade after decade, happy to just fling his poo at those in the arena, yet never harnessing the courage to step into the arena himself, instead drawing comfort from the familiar smell of his fingers, from mindlessly repeating the same hypnotic mantra, and from the knowledge that, if he waits long enough, perhaps until the time the sun goes supernova, he will be eventually vindicated.
Its all good. I've lost $1800 In the stock market and gained 15k in Bitcoin..... and I'm taking profits in Altcoins as they go up and down now......go figure. lose money in something that's been here forever. And gain a crap load in somthing new. Let it correct. I'll keep adding to it.
riddix profile picture
Down in the stock market while the s&p up like 15% this year? Maybe you should rethink your investment strategy.
You can get more by investing with me
Abel+ profile picture
BTC may make alts appear as "losses" but not really. As long as alts strengthen against the inflammatory dollar, both BTC and alts improve in price.
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