Bitcoin extended correction scenario

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
2599 11
I anticipate Bitcoins two years bull run is coming to an end, and will continue to slowly correct over the coming weeks.

Chart above is a possible scenario.

BTC is hanging by a hair on 1D 50 Moving Average which also aligns with a trendline that's been holding for now.

We saw a touch yesterday, and we'll likely see a break in the coming hours.

Breaking 1D 50MA support will take us straight to 11 - 12.5k area which needs to prove another strong bounce by the bulls in order to avoid another big correction.

If 11.5 - 12.5k area is not able to hold, i expect a further downward movement which will take us to 9.5 - 10k area.
Here lies the 100D MA and another important trendline we previously have seen strong bounces from.

9.5 - 10k support area will likely produce a good bounce. Bulls might be able to take it higher than .5 fib and try to turn the trend back to bullish . I believe odds are it won't succeed and will dump further to the bear target in a massive panic sell off, all across the crypto market.

Bear target: 6.5k
Extended fib target: 5k

Remember News doesn't move markets, but they catalyst events that's bound to happen.
That said, we are seeing a lot of FUD all across the board which also speaks for a bear scenario.
Trade active: It's starting
Comment: Well defended bulls, 13.3k holds for now.
Likely a 16k test will be followed now, and then we see wether we go higher or lower from there.
Trade active: First target hit, It's very likely we will see a bounce from this area.
Trade active: Reckoning day is here.
Trade active: All on track.
Trade closed: target reached: Target hit, likely pullback to 10k from here,
Comment: Extended target looks like a reasonable final target for this correction.
Prepare for the final bear run.
so we won't hit extended fib target? you sure?
imkeshav BharadwajRallabandi
@BharadwajRallabandi, Looks like the initial target was broken through support, so 10k first and then a drop? Thanks
+1 Reply
KTAS BharadwajRallabandi
@BharadwajRallabandi, very unlikely to hit extended target in this round. Lets see the rebound first.
well done, im a TA beginner can you recommend some resources to start with?
Well charted! Thank you.
Good job!
WoW..awesome analysis
I'm sure you've seen the "Lifecycle of a Bubble" chart. If we follow that, it supports a return to the 4k-6k range. For the short term, I'm bearish, but even for the long term I have changed from bullish to neutral on Bitcoin. I would love people's thoughts on this:

Looking at the top 50 coins -
* December 10, BTC had 63% of a $390 mil market, with market cap of $233 mil
* Jan 9, BTC has 37% of a $678 mil market, with market cap of $249 mil
To lose 26% market share in only one month is actually pretty astounding. .... $300 million poured into market in the last month, and BTC is still trading at the SAME PRICE as a month ago.

Now, I can see one of two things happening:
* BTC bulls take over SOON, driving BTC to past the $17k-18k area, causing a bunch of the money in the altcoin market to rotate back to BTC. Let's say this happens and BTC can retake 50% of market share... 50% of $678 mil total market would be a new $339 mil market cap for BTC, and increase of about 50% from current, for a new high of around $22,500. From there, the bulls can keep control and drive it higher.
* BTC bears keep control, and BTC follows your chart above. In this scenario, the entire market will fall, HOWEVER new money will keep coming into the market -- but new money will heavily go into altcoins vs BTC, driving BTC's overall share even lower.... let's say BTC market share can drop to 15% of a $900 mil market (among the top 50 coins). ... This would give BTC a new market cap of only $135 million and a trading price of about $7,000.

NOW, let's say the second option happens... if $750 million is in "coins other than BTC" then BTC will almost definitely lose #1 position to Ethereum, and possibly drop even further down the list of coins to #3, #4, #5...

And, people will realize that even with Bitcoin's incredible year last year, that AMONG THE TOP 40 COINS LAST YEAR, BITCOIN'S RETURNS WERE #21 ON THE LIST!. And, Bitcoin will become like "Myspace vs Facebook" and will cement it's trading along the "new normal" price of about $4,000 and slowly rising from there as the overall market grows.
@chwi03, Thanks for your thoughts on this. I personally think that a variation of #1 will happen because the banksters are going to try to continue to manipulate this market and BTC is the one that now has derivatives contracts and is getting the huge mass media push. I also don't really think that all the altcoin money will run back to BTC - mainly because real platforms are coming to market and these coins will actually show a use case scenario while BTC is just digital gold at this point. I think a lot of the inflated manipulation money that is pumped into BTC (and XRP among others) is leaking out into the other coins. But I still think that BTC is heading for $100k

On the other hand - there is no oversight or transparency with the crypto exchanges and these guys who own them all know each other. There is literally nothing stopping them from all getting together and resetting the market prices at will. This might sound a little out there, but it's been done before in nearly every emerging market on earth - so why wouldn't it happen now? I know that I have watched every time that the market falls - and literally every single coin will fall at the same time. This is an impossibility. This cannot happen in real life. Bots can spread the drop, but for all coins to go down in free fall mode at once is not organically possible.
+1 Reply
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