I've been waiting to post an update on BTC because there are dramatic developments in the space. We have finally seen the capitulation I've laid out over the last few months and now it's time to reassess.
Have we reached a Long Term Bottom, is BTC headed for New All-Time Highs soon?
Likely, No.
Crypto for the first time in its lifetime has found itself in the middle of an Economic Crisis. Not just a crisis in one country, but the entire World.
This led to LUNA's collapse, which influenced Three Arrows Capital to become insolvent, along with Celcius freezing all assets and locking all capital from anyone holding an account.
You can file this down as FUD but I will remind you, that these are the industry leaders. The pioneers that were supposed to lead the evolution of Crypto, yet they chose Greed over the health of the future.
These are just the ones we know about, the ripple effects will likely create waves for some time to come. There were 100's of Billions lost in this disaster.
This is represented by the Total Market Cap here which has found itself on the 200W MA with an astounding 75% drawdown:
And we aren't even in the "Recession" yet. Projections have grown to 50% likelihood a Recession is inevitable.
To look at the situation objectively im not going to make any hard predictions, but rather, give clean criteria for short-term upside or downside for now.
If you look at the chart above, I have outlined a Blue Channel that is very important for BTC.
IF the price manages to close ABOVE the bottom of the Blue Channel, then Short-term upside is likely.
IF the price manages to close BELOW the bottom of the Blue Channel, then Short-term downside is likely.
There are two ways to draw this chart, both represent the same levels but suggest slightly different things:
If you notice in this one, you can see just how bad of a spot BTC is in currently. It not only broke down from the bottom of the Decending Channel it was in, but now it is bearishly retesting this area.
But again, the criteria remain the same.
This is a time where things outside of Crypto are going to continue to affect the space, so if you're currently basing your perspective on just Crypto-related elements, you will find the next few months+ to be very confusing.
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I realize I left this post off implying that forces outside of Crypto are going to continue to weigh on the market, so I thought Id link what I meant by that. Hopefully, this gives a greater perspective:
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As you can see, the price still hangs under resistance which is a terrible place for BTC to stay. It means in the big picture, the dominoes are still ready to keep falling. We do not seem to have reached the end of anything, and I'm still just trying to navigate the waters. It's been some time since my last few posts but believe it or not, not much has changed. If anything things have gotten a bit worse with yet another US10y-US02y inversion which basically guarantees a full-blown recession. Yes, you've read that right, we haven't even officially "Entered" the Recession yet. I see over and over "Bottom is in" or time for "Rally". I wholefully believe the time for easy money ended in 2021. What people have come to expect after the 2020 Boom, has tainted expectations across the board. It's a dumb money-driven market with retail trying to front run every dip, but the thing to understand is the real money "Smart money" knows this is happening, and rather than fighting the market, they are preying on retail dip buyers. They bait them in, and then they wipe them out, rinse and repeat. Nobody knows where the market is headed, but we do know human emotions and habits. Just wanted to give a few words for an update to show where my mindset is and that I'm developing more analysis. In a time like today where we are for sure going down in the history books, I do not believe a ton of posts serve anyone any justice. It's the important, very specific details that matter. Stay Tuned!
Your last comment regarding traders basing their perspective on Crypto-related elements alone is so true. Far too many times I have read over the last number of weeks that we have hit "bottom" and BTC/crypto is going to the moon again, they are failing to realise the outside influences, failing to take a step back and remove the blinders and realise that crypto, on the bases of comparison to other financial markets, is a tiny element of the broader markets and is easily - as demonstrated recently - and heavily influenced by outside elements. You just need to look at the Daily or Weekly Accum/Distribution line and see it is now arching from topping out at the previous two ATH @ ~69k. Throughout BTC history, regardless of the bear markets and sell offs from ATH's at 1K, ~$10 and ~20k, the accum/dist line continued to paint higher lows and higher highs - this is not happening any longer. There is no further government stimulus payments, people are now EXTREMELY tight with their capital, clearly moving into less risky investments or none at all. In my eyes, we are far from bottoming out. I suspect we will meet support around ~12K with potential wicks to even as low as ~8k but this will be in an extreme sell-off imo. 12K seems likely and has coincided between 0.618 and 0.786 fib levels at 14.7k and 9.9k respectively as well as some Elliot Wave analysis I have been reading over the recent days/week. Thanks for sharing your analysis. Best of luck with your trading.
NoOneWhoIsSomeone
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@WPTraders, Awesome comment, it shows you have put thought into areas many have not. Keep expanding your horizons and your knowledge. The more knowledgeable you become, the less informed you begin to feel. Appreciate your input, and I wish the best of luck to you as well!
allibaba2
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@WPTraders, Finally someone who focus knowledge before fud. I totally agree with this assumption based on: 1.) MA weekly 300 and 400 2.) COVID lows 2020 3.) Fibonatchi 4) 85% down from 70.000 These point to 9.400 - 11.600 end of july
rockhudsonfun
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@allibaba2, "These point to 9.400 - 11.600 end of july" sounds very reasonable as by then we will have another 0.75% rate hike as inflation numbers are going to be only a bit lower than a month before and by the end of July a recession will be officially announced. This is where we will reach a culmination point and wick to 8k and then will be in $10-20k range for the following 18 months or so. Just feels this way taking everything into an account. Just charts by itself is a very unreliable tool when underlying fundamentals have changed completely.
rockhudsonfun
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@WPTraders, THIS, makes a lot of sense..."In my eyes, we are far from bottoming out. I suspect we will meet support around ~12K with potential wicks to even as low as ~8k but this will be in an extreme sell-off imo."
Co9
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Favourite analyst. :-)
NoOneWhoIsSomeone
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@Co9, Appreciate you immensely!! I will have a new post out tomorrow (8/02) on SPX and then BTC hopefully same day.
crowntrade
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I agree that many people call bottom when they have no idea how to properly identify confirmation of such an event or fail to do so. I am not calling bottom because I have not seen any confirmation of such event occur at this point. Although, I can say that most prices of coins are in distressed price areas now at this moment and is a good time to be lightly dollar cost averaging with long orders down. Just like how “smart money” has washed out most of the tourists from the market, I believe a scenario will be placed where the bottom will be reached and most retail traders will be so scared by the time the bottom is set that most will shake & hesitate to pull the trigger on anything, even when it is a good deal and miss the bottom completely. Right when everyone thinks it is going to get so much worse and blood in the streets will monsoon, it doesn’t. It will be another “haha gotcha” moment. I think in the next few months we may be able to see something happen.
You just need to look at the Daily or Weekly Accum/Distribution line and see it is now arching from topping out at the previous two ATH @ ~69k. Throughout BTC history, regardless of the bear markets and sell offs from ATH's at 1K, ~$10 and ~20k, the accum/dist line continued to paint higher lows and higher highs - this is not happening any longer. There is no further government stimulus payments, people are now EXTREMELY tight with their capital, clearly moving into less risky investments or none at all.
In my eyes, we are far from bottoming out. I suspect we will meet support around ~12K with potential wicks to even as low as ~8k but this will be in an extreme sell-off imo. 12K seems likely and has coincided between 0.618 and 0.786 fib levels at 14.7k and 9.9k respectively as well as some Elliot Wave analysis I have been reading over the recent days/week.
Thanks for sharing your analysis. Best of luck with your trading.