Building on what we have been discussing, price manipulation ‘is’ the most important driver of movement in all of the digital currency markets.
We have spent time discussing the basics of this and the general methodology that allows manipulators to draw profit from a specific digital currency.
With this being said, it is a must that you begin to look at the Bitcoin/USD market within the context of this culture of price manipulation.
This will enable you to view the candle sticks for what they truly are: the footprints of a price manipulator!
I have promised to reveal the most efficient method of conducting technical analysis, and that is what you will learn after reading this document.
However, you must wipe your mind of any and all of the conceptions that you currently hold relating to technical analysis.
First, you must understand what you are looking for.
In simplest terms, in conducting technical analysis, you are attempting to reveal the current game plan of the manipulator.
Is he cashing out his holdings, or is he setting the stage to allow himself to cash out?
If the latter is true, then one can only expect higher prices – as the manipulator commits his efforts toward buying up the price of a particular digital currency.
He does this to pull in market novices that know no better.
He does this to attract fanfare, to build sensation and ultimately to increase the cumulative value of the orders that are sitting on the buy side.
Once it becomes far too expensive for him to continue buying up the price of his currency, the manipulator is left with only one course of action: LIQUIDATION!
… And it is this liquidation that market novices refer to as a “crash,” “dumping,” or a “bearish market.”
But rest assured, the manipulator is collecting huge portions of profit as he begins this process of emptying his warehouse – sending the price of this currency downwards into a region where accumulation is allowed to occur at a reasonable price, and this entire process of manipulation to be rinsed and repeated.
With this being said, I call your attention to the Bitcoin/USD market.
I call your attention to the very first price rally that occurred in this market.
BITCOIN RALLY #1
Begins: March 12 2012
Ends: March 31 2014
At PumpersPicks our ethos is ‘Long-term, or Nothing!’
ALL of the big moves erupt over the time span of several months. Each and every one of them.
With this being so – it is a redundant exercise to adopt the reality of a day trader.
You see, a day trader concerns himself only with the happenings that occur within the meagre timespan of 24 hours.
For him, trading is his job – and as such, he treats it like his job.
He wants to be making money on the hour.
So he condemns himself to the misfortune of analysing the most irrelevant charts: 1 hour price charts… 30 minute price charts… 15 minute price charts.
In doing this the day trader takes a 100 percent black, limousine tint film and places it on the windscreen of his car – and then attempts to drive his wife and children home, through the night, whilst blindfolded and suffering from the influences of several mind altering narcotics.
A recipe for disaster!
But a recipe that day traders are continuously applying to the digital currency markets.
You must make yourself aware of the ENTIRE picture.
You must place yourself at the vantage point of a roof top sniper… an eagle that swoops down from the highest altitude and lands square on the shoulder blades of the rabbit that it has been stalking for the past several hours.
The bigger picture reveals everything to you.
It reveals something that is MOST important when attempting to draw profit from a particular currency.
When you look at the bigger picture, you are looking directly at the ‘behaviour’ of the individual that is manipulating your chosen currency.
… And patterns begin to reveal themselves to you.
Let’s concentrate on two indicators.
The moving average, and MACD. Let’s use them simultaneously.
The image above reveals the initial genetic code of the Bitcoin/USD market.
It exposes the genetic make-up of Bitcoins’ very first price rally.
This is the DNA that has existed in each and every rally that has erupted in the Bitcoin/USD market.
Looking at the moving average you can see that, on the day that the blue line triumphed and rose above it’s orange counterpart – the price was at a lowly $4.00 per coin.
The price was then pushed all the way up to $16.14 per coin – representing a gain of more than 300%.
… The price then falls from this high, but – it is instructive to note that the blue moving average line stays above the orange line.
The gap between these lines remain.
This suggests a continued long-term push upwards.
The above chart shows that the rally that was initiated in March 2012, has continued for nearly a year – uninterrupted.
During this time span the price has matured from an infantile $4 to a sprouting $31.49.
This represents more than a 650% increase in value.
For the uninitiated… for the ‘weak handed’ novice traders that populate this market: all it takes is one, long, red candlestick to force them out of the market.
But understanding that what you are actually looking at is the fulfillment of the pre-planning of an asset manipulator allows you to view the market from a different angle.
It allows you to do something that a day trader just doesn’t have the time to do.
It allows you to think.
It allows you to engage your abilities of logic and reason, to assess what is really happening.
Looking at the above image, you can see that a larger price move is beginning to occur, and that this move is occurring over a shorter time span.
This is reflected in the MACD, as the bars are now larger and rising in height each week – with more space being created between the blue and orange MACD lines as the move continues.
A move from $4 to $97 dollars per bitcoin represents a 2300% growth in value, within one year.
Imagine now if you were in possession of tens of thousands of bitcoins that were mined during the earliest days of its public release?
Most wouldn’t have purchased any Bitcoins during this time period… and, the majority of the ones who did will have sold at 10, 20 and 30 percent gains – just judging human nature as it is.
At this point there is no reference in human history that would have lead anyone during this rally to form the opinion that a 2300% profit could fall in their hands so easily.
So my assumption here is that there was a limited amount ‘genuine’ investors and holders of bitcoin, through the duration of this particular move.
I believe that people were completely liquidating their holdings at small profits, and then buying back in upon seeing that the price was still moving upwards – then subsequently cashing out again with small profits… and repeating this process as the price continued to move upwards.
I’m certain that the main benefactors of this rally were the individuals who were mining Bitcoin from day one.
The only reason a person would commit to mining this brand new form of an asset in its earliest stages, is if they were incredibly insightful and intelligent – or they were the actual creators of this asset and therefore privy to a war chest of inside information that wasn’t available to the common investor.
Either way, the image above reveals the fingerprints that were left behind by these manipulators as they created the skeleton of the Bitcoin/USD market.
At this point, some are declaring Bitcoin a scam – and proclaiming its death.
I mean clearly, a currency that plunges in value from $259.34 to $40 within a week is something the world hasn’t seen in modern times.
So it must be a scam.
This being the general feeling at the time, I doubt that many people continued to hold onto their coins during this period.
Providing the manipulators a much lighter sell side to buy up – which is what they went ahead and did eventually.
The chart above depicts bitcoin at $259.34 per coin – this is a 6000% increase from the $4 per coin price at the start of this rally.
However, as you can see in the chart, a brief period of contraction is beginning.
The lines in the MACD have swapped places: the orange MACD line is now above it’s blue counterpart and the market is beginning a brief period of descent.
In the above chart, the blue MOVING AVERAGE is beginning to dip downward closer to its orange counterpart.
At this point, the majority of bitcoin holders will have been looking for the exit, in fear of achieving full and complete financial ruin.
Despite this, the manipulators continued to act out their plans.
Now you have to note that all of the images above are depicting one single price rally.
The blue moving average line has not falling below its orange counterpart since March of 2012.
This is a price rally that has lasted for more than one year, uninterrupted.
A price of $363.65 per each single Bitcoin marks a near 9000% increase from $4 per BTC – the BTC/USD exchange rate at the start of this move upwards.
You can see that the MACD indicator reveals when a move is accelerating and decelerating, while the moving average accurately details the long-term viability of the ‘overall’ move.
These are the tools that day traders shield themselves from.
This is the reality that 90% of those who participate in this market are blind to.
The image above shows that the volume is rising!
More than a year and a half later – this rally is still ongoing.
Those who understood how to use the Moving Average indicator would have been aware of this.
However, the Bitcoin market is filled to the brim with market novices.
So I’m left with the conclusion that the majority of Bitcoins’ supply at this point will have been in the hands of its creators.
I’m not saying that outsiders didn’t profit during this rally. Some did.
What I am saying is that the ‘only’ individuals who rode this wave from $4 up to $1,163 USD per coin – were those who were well informed. More informed than the average Joe Blow.
So well informed in fact, that they bagged a near 29,000% profit!
Now that applies to those who got in at $4 per coin.
The individuals who mined tens of thousands of Bitcoins using their laptops when the mining difficulty was non-existent – these individuals are now able to convert the coins that they obtained at zero cost, for ‘Millions’ of USD.
So we can analyse B.S. stats all day, but it all means nothing.
Turning those candlesticks into a story… Using those candle sticks to paint the picture of the reality of the market is the only way to achieve long term profitability.
These heavy red candle sticks that appear after each major surge upwards seem to occur on schedule.
With this being so, we are now more aware of the habits, and consistent behaviour of those who are co-ordinating these price moves.
Perhaps they are using some form of an automated trading tool to manage this market.
They may have set specific variables, parameters and rules for this automated bot to play by.
Whether this is the case or not, we are seeing several recurring patterns in the charts above.
The image above marks the very first time in two years, that the Orange moving average line, surged above the Blue line.
This marked the end of Bitcoins first price rally – during which the price moved from $4 to $1,163 per coin.
At PumpersPicks, we do not trade the candle sticks.
We use the candle sticks to gain insight into the happenings that are occurring behind the scenes.
In terms of having a guide on which direction the market is going, we use only the Moving Average and MACD indicators.
Everything else is white noise.
There aren’t any publications that proclaim that Bitcoin is currently only in its second ever price rally.
But, the proof is in the pudding!
The images above reveal that the Blue moving average line stayed above its orange counterpart from March 2012, all the way up until March 2014.
During this period the price traveled in one direction only: upwards.
It was only when that Orange moving average line surged above its blue counterpart that prices began to fall.
What goes up must come down.
After building Bitcoin into a huge, mammoth, money magnet – with billions of dollars’ worth of buy orders across all the main exchanges: the manipulators can no longer afford to continue to push the price higher. (if they did, they would have.)
It is clear that, at this point, the cumulative value of the sell side orders made it impossible and far too expensive for the manipulators to continue buying up the price.
So… They began to empty their warehouses.
You see, Technical Analysis is not to be used to reveal what will happen – but rather, what is happening.
And then you base your investment decision on that thing that you can see happening.
Is the manipulator buying up the price?
How long has he been doing this?
Is he emptying his warehouse?
If so, then why?
To raise cash needed to continue to push prices higher, or is this the climax of the pump?
You have to ask yourself these questions, formulate answers and then make your investing decision.
Going back to the very first chart, you can see that once that Blue moving average line surged away from the Orange line, it did not fall below it again until two years later.
This is the nature of the Bitcoin market.
What I must ask you to do, is to analyse the price movement in the BTC/USD market from the final candle in the last image above, till this present day.
Analyse it the way I have.
Present the story of what is actually happening, and then form a conclusion as to what you believe is going to happen next.