According to historical data BTC dropped too far for good news.
In one of my previous ideas I posted that I felt that maybe we were going to be looking at ATH prices sooner than later. I did call for the correction down from 10k to roughly about this area... I also drew a lot of conclusions from the price action that happened in 2016. Screenshot of the price action below:
However, further researching the price drop, I concluded that the current price has actually dropped too far for the same parabolic situation to continue.
By dropping far below the lowest low (right around 9k) after the 14k high (before the drop from 10k), the price action developed a pattern far different from the 2016 pattern. The pattern we are likely in is more similar to the one in August of 2014. The price action looks EERILY similar to what we are witnessing now...
The main chart is showing the current pattern developing. The screenshot below is what looks to be a frighteningly similar pattern to the one we are in now.
Strictly looking at the extended fibs from the 9k low to 14k as a reference point, my conclusion is that unless things change far and fast. Things are not looking good. Not only does it not look good, it's a pretty nightmare scenario. IF that trend continues and is a good depiction of how price action will develop. We are looking at Bitcoin prices of around $1,000 per BTC... Yes. That wasn't a typo. $1000...
Some things to ponder:
The market is a LOT more mature than it was in 2014. We have a futures market that we didn't have in 2014 that provides a little bit more stability (and manipulation). There are also a ton more people investing. The question really comes to how much automated trading looks at these scenarios and what those algorithms do?
Yes, we tend to think that "whales" affect prices. Well I hate to tell you this, but most "whales" don't just do simple market orders like us plebs do. So the question stands: what will the algorithms do? Continue the same historical trends or will they be changed?
However, further researching the price drop, I concluded that the current price has actually dropped too far for the same parabolic situation to continue.
By dropping far below the lowest low (right around 9k) after the 14k high (before the drop from 10k), the price action developed a pattern far different from the 2016 pattern. The pattern we are likely in is more similar to the one in August of 2014. The price action looks EERILY similar to what we are witnessing now...
The main chart is showing the current pattern developing. The screenshot below is what looks to be a frighteningly similar pattern to the one we are in now.
Strictly looking at the extended fibs from the 9k low to 14k as a reference point, my conclusion is that unless things change far and fast. Things are not looking good. Not only does it not look good, it's a pretty nightmare scenario. IF that trend continues and is a good depiction of how price action will develop. We are looking at Bitcoin prices of around $1,000 per BTC... Yes. That wasn't a typo. $1000...
Some things to ponder:
The market is a LOT more mature than it was in 2014. We have a futures market that we didn't have in 2014 that provides a little bit more stability (and manipulation). There are also a ton more people investing. The question really comes to how much automated trading looks at these scenarios and what those algorithms do?
Yes, we tend to think that "whales" affect prices. Well I hate to tell you this, but most "whales" don't just do simple market orders like us plebs do. So the question stands: what will the algorithms do? Continue the same historical trends or will they be changed?
(Essentially the entire market cycle happened in a matter of 1.5 years in 2014, vs the roughly 3-4 years its likely taking now)
So The continuous drop that you saw in the 2014 price scale will likely look somewhat different than the daily action is on the uncompressed timeline that we are currently in.
This is what I'm roughly thinking will happen:
If we do happen to get above 10k soon, I will rethink the scenario, but as far as it is right now, things aren't looking good if history repeats itself.