crimsonronin
Short

I become death, the destroyer of worlds; BTC to $3k

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
I've been tracking the bear market for some time now. In fact back in Jan 19th, I called for BTC to head to the $8k area and below. I have since presented other ideas about BTC heading to $6k and onto ~$3k. I believe we are now well positioned to see BTC make a move downwards, especially if we close below the major trendline at ~$8k.

Over the past week I've been tracking the following:


Key points
  • A large rising wedge has only hit the first downside target. The larger target points to <$3k.
  • Rejected at the MA's at around $9k.
  • Impending death cross (ie. 50MA crossing the 200MA)
  • Volume indicates that we haven't bottomed yet. (see volume at prior bottoms is almost double the current volume ).
  • Closing below 8k on the daily is super bearish

How this will play out once we close below 8k
  • Head down to the 50% at ~6k.
  • Bounce to the 38.2 fib at ~7.5k (that's optimistic, I'd potentially see that being a bit lower)
  • Once rejected at the 38.2, head to ~3k.

I believe the move to $6k will be relatively sharp, but the subsequent move down to ~$3k will be a long grinding affair similar to the bear market of 2015.

How is this invalidated
  • Close above 8k will delay things
  • A close above all the MA's (~9.5k) and 23.6 fib will mean we are out of the woods
  • A close above 10k will be a positive sign
Comment: We closed below 8k on the daily. There is still a slight chance BTC could bounce, but it is highly unlikely considering:

we were rejected at the 200MA


we are trading below the major trend line


Lets see how the next 24-48hrs plays out before opening a sizeable short.
Comment: We broke down out of the bear pennant:



We are sitting right on the 38.2 fib, but according to the volume profile, there isn't a great deal of support here.

The pennant target is 6.8k - 7k, although we will likely over run to around 6.4k. I'll be waiting for a pullback to around 7.6k - 7.8k before going short.
Comment: We didn't get the short position we were hoping for, but it has continued on and hit our first target of ~$7k.

I still think the likely place for a genuine bounce will be around 6.4k.



I believe a bounce at ~6.4k should see us go to at least 7.5k or maybe a little lower.
Comment: Happy long weekend everyone.

I believe we will see about $5.9k; a little lower than I anticipated for this first run. We should see a nice bounce which will provide an opportunity for a scalp trade.



and here in the original chart:



Good luck friends
Comment: Hi every one. I hope you had a great long weekend (if you got one.... I worked all of it!!).

I believe this is now the bounce we anticipated a few days back.



It has the potential to go higher than I originally anticipated; maybe even to 10k as pointed out by @retiringsoon1 in the comments.

I've gone long from about ~6.8k and will be looking for an exit between 7.6k-10k depending on price action. I'll keep you all updated.
Comment: Hi all.

I have to make a correction to my previous post. As pointed out in the comments by @patilan, this actually indicated a bullish correction. I don't believe, at least at this stage, that is the most likely outcome.

What I should have drawn is:


This shows a bearish descending triangle. I drew the red breakout because this often happens; a fakeout breakout which traps a bunch of people into thinking we are going higher.

Considering the weakness at the moment, I'm not even sure that this is in play. We are working on a bear flag on the 4HR, but it *feels* like it could almost break down now due to how fast we lost ground over the last 24hrs; we blew through the 20 and 50 MAs with very little resistance



The only thing that provides some hope for some more upside is that we are a very long way away from the 50 and 200 daily MAs



However, once sentiment turns bear, as it has done, there is little help from these.

For now, lets watch to see if the bear flag plays out, if it does, we will likely see low $5k.

I'm keen to hear everyone's thoughts, so keep the comments coming.
Comment: For reference here is a snapshot of the original idea:


It's been pretty spot on so far. I should step back and see the forest occasionally!
Comment: Hi fam,

I see a bunch of analysis on TV has been concentrating on a potential falling wedge, with many suggesting it is a bullish set up. I'm hesitant for a few reasons:

1. We are still in a bear market. If this wedge formed from a nice bull run, then I would be super bullish. It did form one from 20k to 6.9k, but it failed to break out at the TL.
2. We have had lower daily and 4hr closes than the prior low. Wedges should not retrace >100%.



Since there is some desperation in the market because of just how low we have come, many will seize on anything remotely optimistic for another bull run. So here is what I _think_ will happen:

1. We break out of the wedge to the upside.
2. Many will fomo buy and take this as confirmation of a bullish falling wedge.
3. We will get to ~$7.6 - 8k (which is a great scalp trade if you bought in now).
4. But we will be rejected due to the resistance of the TL, the fib, the MAs and the flag.

Speaking of the flag; here is what it looks like atm:


So when will this be invalidated:
1. If we close on the daily higher than the bear TL (>$8k)
2. We close above the long term TL at ~9k
3. Get above all MA's on the 4hr and daily.

That's a lot to get through!
Comment:

A fractal from the first major leg down.

I'll have some more thoughts on this in the morning (~8hrs or so), but for now I'm off to bed.

Have a good night / day everyone.
Comment: Update over at
any more thoughts mate? Appreciate the updates.
+1 Reply
@kitkat16, hey mate. I'll have an update "tomorrow" (ie. ~8-10hrs from now). There hasn't been a lot of action over the past two days. But my usual take is the longer we spend along a support in a down trend, the more fragile it becomes. This also still looks like the best approximation for now

Reply
Isn't this a bullish correction? Shouldn't we break the resistance after wave E is complete ?
+1 Reply
@patilan, Thanks for the comment. Spot on. I updated in my last comment.
Reply
patilan crimsonronin
@crimsonronin, you're welcome.
I like the new wedge pattern. Did not see this coming ...
Reply
Hey man..happy easter! Looks like the 6k will be reached but I think we will have one more bullish run to 10K before 3k if that will happen.
+1 Reply
crimsonronin retiringsoon1
@retiringsoon1, happy easter to you too.

You are correct, I don't believe it will be a straight line to 3k; rather it will be a long drawn out process over some weeks and months (like the 2015 bear market).

10k is an interesting idea. Is it just that it's a big psychological number or are there other indicators pointing to that for a bounce?
Reply
retiringsoon1 crimsonronin
@crimsonronin, it is alittle above the log scale down trend line. If we are going down to 3K we will need a bull trap too I think. So far we have not broken that log down trend line yet.
+1 Reply
crimsonronin retiringsoon1
@retiringsoon1, At the macro, it's looking like a great setup now for a 10k trap. Good call.
+1 Reply
retiringsoon1 crimsonronin
@crimsonronin, cheers mate..thanks for the mention :)
+1 Reply
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