The cryptocurrency market had a great run the last two years, primarily based on speculation and money being pumped into the US economy. The euphoria of quick gains was on peoples minds and they had a little bit of extra cash to gamble with. Institutional investors had the opportunity to capitalize on the positive sentiment and the house of cards started being built. Some thought it was sustainable and others kept their heads on straight realizing the party can't continue at the pace it was going forever.
You will see people putting up 4H and daily charts talking about turnaround and bullish patterns. It is important to remember markets have history and a daily chart in the moment seems like good history. However, it does not serve anyone to look at such an acute timeline.
So, let's zoom out and look at the weekly chart. You can look at the monthly as well. However, the weekly does give a good snapshot of multiple years of data.
I am particularly interested in the last major correction in 2017 where we can see an approx. 85% drop from it ATH which bottomed out in Nov of 2018. Provided history often repeats itself and there are still many headwinds to overcome, it is completely reasonable the cryptocurrency market could see a similar correction from the 2021 ATH. The Fibonacci level at 1.61 justifies this same scenario.
What does this mean? Well, it would put Bitcoin in the $13,500 range. Which, considering where BTC was trending pre-pandemic is a totally reasonable range to assume it could return. Nothing fundamentally has changed about BTC outside of positive to negative sentiment. We still have not seen what the US will choose to do in terms of regulation, and the US is definitely fond of taxation and regulation.
So, my thought is it is important to hold tight and not think this is turning around anytime soon. Assuming you don't want to scalp / short. If it's a long position you are waiting on, just continue waiting.
You will see people putting up 4H and daily charts talking about turnaround and bullish patterns. It is important to remember markets have history and a daily chart in the moment seems like good history. However, it does not serve anyone to look at such an acute timeline.
So, let's zoom out and look at the weekly chart. You can look at the monthly as well. However, the weekly does give a good snapshot of multiple years of data.
I am particularly interested in the last major correction in 2017 where we can see an approx. 85% drop from it ATH which bottomed out in Nov of 2018. Provided history often repeats itself and there are still many headwinds to overcome, it is completely reasonable the cryptocurrency market could see a similar correction from the 2021 ATH. The Fibonacci level at 1.61 justifies this same scenario.
What does this mean? Well, it would put Bitcoin in the $13,500 range. Which, considering where BTC was trending pre-pandemic is a totally reasonable range to assume it could return. Nothing fundamentally has changed about BTC outside of positive to negative sentiment. We still have not seen what the US will choose to do in terms of regulation, and the US is definitely fond of taxation and regulation.
So, my thought is it is important to hold tight and not think this is turning around anytime soon. Assuming you don't want to scalp / short. If it's a long position you are waiting on, just continue waiting.