VictorCobra

How Bitcoin Can Break Out Of Consolidation - Part 2

Long
GEMINI:BTCUSD   Bitcoin / U.S. Dollar
I'm still not totally convinced Bitcoin and the rest of the cryptocurrency market have reversed trend to the downside. My brain needs a break, so I don't really want to write a whole essay here (proceeds to write a bit of an essay anyway). I did want to provide an update for what I think could easily happen over the coming weeks.

In my previous analysis, Bitcoin headed to the extreme low-range of the possibilities I presented for an end to this consolidation phase. Price even dropped EXACTLY to the pink trendline on my Bitstamp chart. Press play and see. Trendlines are pretty incredible.
Bitcoin , along with the major crypto indexes TOTAL and TOTAL 2 have held onto their monthly 9 EMA's. It came VERY close for Bitcoin . From a technical perspective, the bull market survives to live another day. To me, a bearish signal would have been a close below. That would have told me to sell some crypto on any larger bounce, but now we're setting up for potential continuation.
TOTAL and TOTAL2 still look very strong, in my opinion.
There could be one more test of the 9 EMA , but I think a slow recovery from here is just as likely, as outlined in the chart for this analysis. Again, if we see closes below the 9 month EMA , I will become more concerned.

The Current Situation:

Firstly, Bitcoin will need to break the current downtrend (light blue), which it currently seems to be attempting. Then, price will need to move up quite a bit over the next week or two. A strong recovery will bring back buyers, and many who exited at a loss would likely return to the market. If the environment remains bullish enough, this can invite new market participants who may have been waiting for signs of a recovery. People are taking crypto a lot more seriously now, believe me. And by seriously, I don't mean merely in terms of financial gain. People are seeing its philosophical, social, and economic implications. Even some people in my field (social work) are starting to take notice.

I had a shower thought this morning - cryptocurrency communities are almost like small nations without borders. Or like small religions. What's great about this space is that there's a coin with a model that fits many different social/economic values. And we get to choose. We don't choose where we're born, or the family we're born into. Crypto reflects the importance of intentional community. Even tribalism (often seen as a negative element of this space - it absolutely can be annoying) is evidence that all anyone really cares about is community and shared values. Sure, everyone wants to make money and build wealth for themselves. But crypto provides a space where it's at least a little easier to do it together, rather than against each other. The only problem is, those with the true power in this world are now in the space, there's no denying that. The true test here is to see if crypto can continue to grow and create wealth/security for newer generations, or whether it crumbles under existing inequities and weaknesses in our current economic system. The only bearish case for crypto I have is that the current economic system is unsustainable, and this will have a ripple effect that will cause everything to collapse. We could see a major war, environmental catastrophe, who knows?

But at least crypto provides a new, unique opportunity to put our faith in community during the digital age. During a time where everything feels like an echo chamber, it's helpful to believe in something, and to find others who believe in that thing. Though sometimes it feels like it's hard to know what's real and what's not. The great thing about life is that it really doesn't matter.

This is not financial advice. This is meant for speculation, entertainment, and education only.

-Victor Cobra
Comment: Based on my recent analysis on BLX, if Bitcoin is to enter a bearish cycle, I'd expect something like the green to occur. That would be more *reasonable.* The yellow shows a bullish projection if Bitcoin can break the log curve resistance.
However, if Bitcoin also breaks my trendline on Bistamp, we could see a more abrupt selloff towards sub-$20k prices. PermaBears really want this scenario because it would be a long term technical blow to Bitcoin's systematic price appreciation.
Comment: I must now consider the immediate downside target on a breakdown. Bitcoin has unfortunately been unable to break the downtrend this week, and I believe the timeframe for a larger bounce from these levels is starting to run out. If bitcoin cannot break the downtrend here, it's possible we see something like the red, targeting the parabolic curved support near $24-25k
Comment: There is still support at $30k, but the market has really failed to attract substantial buyers at current levels, so far.
Comment: The green can still happen, it's just starting to appear less likely now.
Comment: For bulls, buyers will need to hold prices here long enough to allow the 50 to cross over the 100 MA on the 4H. This would also likely coincide with a break of the light blue downtrend. The longer this takes to play out, the larger the move to the upside will need to be in order to propel Bitcoin into a new bullish trend. For now, either scenario is on the table. Of course, I'm betting on the upside. If I'm wrong, my initial risk is out, and I may choose to buy at lower levels.
Comment: Looking at the Coinbase chart, there's also a possibility Bitcoin briefly tests this purple trendline (though this puts it below the trendline on Bitstamp). This also coincides with the 50w MA, which has already been tested by LTC.
Comment: The above is really the worst case I can see where Bitcoin still resumes the uptrend within the coming months.
Comment: Last chance at the Bitstamp trendline here. If buyers can't show up soon, we're pretty much in uncharted territory - next support would be near $24-25k, though some are eyeing the $28k level. The next MAJOR liquidity level is between $13k-20k. So I'd really look for the most buying to occur around there, should Bitcoin fail to bounce soon.
Comment: Could also follow my red scenario here and drop to the curved support again. Confirmation of a bear market for me will be the monthly close. There's still a lot of time left in the week/month for buyers to show up. Things look objectively bad, but crypto likes to turn around when people feel the worst. I still see plenty of bullish analysis around (myself included), but bears are certainly coming out to play.
Comment: If Bitcoin manages to hold the trendline here, something like the yellow seems like a reasonable scenario. Would need to reclaim those light blue trendlines. Looks honestly way more healthy than anything else I can draw. The lower we go, the worse it'll look. So far, the setup for continuation still exists.
Comment: Well, it's taken some time for this to play out, but it seems that Bitcoin has broken the downtrend and is now ready to test some higher levels not seen for some time. Whether or not BTC can break the curved resistance will be telling.
Comment: Decent reaction off the trendline I posted from Coinbase on June 5th
Comment: Zoomed out
Comment: Clearly the green projection is invalidated, but if Bitcoin can simply break the $43-46k resistance and the yellow curved downtrend....we can actually see $50k+ prices again. Can go straight to the pink trendline on the above Coinbase chart.
Comment: You can see it holding above the downtrend as well, if the daily candle closes around here or higher.
Comment: If I draw the curve with the most possible touches, it seems we might finally be breaking the downtrend. Very interesting.
Comment:

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Comments

Appreciate the continued analysis and agree the buyers need to show up. But as you very articulately stated, sentiment changes on a dime!
100 coins
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I'll put my stablecoins where my mouth is and purchase certain alt if/when BTC hits 28K. This bull market is far from over and I still see ~4.5T by Xmas. Sounds funny to say with the crypto fear/greed index hovering in the low teens but we've been in this long enough to know better :)
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VictorCobra BCBackerBacker
@BCBackerBacker, Oh absolutely. Would be completely unsurprised if we've already hit bottom as well. Just watching out for a potential liquidity run to sub-$20k briefly. Buyers might be too greedy for that to happen, but certainly on the table.

-Victor Cobra
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BCBackerBacker VictorCobra
@VictorCobra, I'm watching out with you too. Will feel better with a 40K+ close sometime soon. But worth being prepared for a drop to the 20s which I will see as a buying opportunity for certain alts. Thanks again as always for your invaluable insights!
Reply
Excellent and well thought out technical analysis as usual. I remain bullish and think we see a month or two of choppy action mildly to the upside. Also appreciate your philosophical perspective on the matter and I completely agree. Rather than just another financial institution, this is instilling a new way of life and thought. To that end, I say those who became fearful of late will become greedy again quite soon and jump back into the party. Each time they do I think crypto has a tendency to keep them ensnared.
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VictorCobra BCBackerBacker
@BCBackerBacker, Thanks for your comment! Always good to see you around :) I actually think much further sideways movement at current levels wouldn't be great, as it would give greater opportunity for some MA's to confirm bearish crosses. I think the best chance for bullish continuation would be a recovery to the $46-53k range, some more chop, and then an attempt to break $60k with even more chop until finally a run towards ATH. I think prices need to exit this $30-40k range soon. And I definitely agree with you about sentiment.

-Victor Cobra
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BCBackerBacker VictorCobra
@VictorCobra, Yes I totally agree! I mean choppy but at prices higher than these. I was actually looking toward 47.5K by the end of this week but unless we get some momentum, it doesn't look good. In either case, sentiment appears to be reversing from the low of 10 on the fear and greed index. Hopefully we get into regular fear by the weekend and not extreme, lol.
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Chart is only dreaming..

throw 100.000$ in and lets see how sure u are any more..

Btc is still bearish
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VictorCobra FlowersFor
@FlowersFor, my cost basis for Bitcoin (if I sold all my crypto at the moment for BTC) is around $4200, and my initial investment is already pulled out. I’ve managed my risk. I did purchase some LTC recently at $119, $135, and $175. We’ll see. Prepared for either scenario, and can buy again if it retests the lows. If we get a recovery, but it still looks weak, I may take some more profit off the table.

Everyone’s situation is different. I understand for people only entering the market now or recently, it can be stressful. Just good to have a plan and manage your risk appropriately.

-Victor Cobra
+2 Reply
Nice
Pleasant to hear clear words
Thanks
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