As mentioned before, no one truly knows where we will end up bottoming but 99% of traders will probably get rekt trying to find that bottom because it usually doesn't pan out according to market expectations, so better to be open-minded without being too fixated on a set bottom target because maybe that bottom is already in. We have quite a few reasons why bitcoin can and should capitulate below our $3k support, as explained in my previous posts, but would that not maybe be too convenient?
When we were still consolidating close to our $6k support, the market sentiment was generally but the market had other plans. Now that we have been consolidating close to our $3k support, the market sentiment has been generally with JP Morgan even throwing out $1200 targets, potentially so that you can sell right into the traps set by these market makers, who probably won't let the next cycle begin before enough people have either shorted to catch the next knife, or thrown in the towel after effective market capitulation. The question is, which of these 2 strategies will be used before reversing the general direction and trend of this market?
If market sentiment is generally , I'm inclined to assume that this would be the perfect area of accumulation since there should be a lot of traders waiting for their bottom targets throughout the upcoming months of consolidation, while the market becomes range-bound, giving the market makers ample time to accumulate your btc while you sit all tethered up waiting.
Reasons why this might be either close to the bottom or already bottomed:
-MFI is now in the oversold territory on the monthly chart for the first time in bitcoin's history
- Weekly SMA200 held as support in 2015
- sitting close to the same area of support as is 2015
- and narrowing for a range-bound consolidation, similar to in 2015 before the next bull cycle
- Bitcoin bottomed at a 121.4 fib extension of the first wave of the downtrend, the same level in 2019 is around $3k
- Similar drop from the 2 cycles' ATH
- Similar drop from the previous swing high
- Major horizontal support around $3k on the weekly chart
- Total crypto market cap closing in on $100k which held as very strong resistance in the past, will it hold as major support?
- We could have a soft bottoming reversal process compared to the sharp peak reversal seen when we hit the ATH (see inverted chart to illustrate this and how we could be ready for a range-bound market after already having found a bottom)
Potential capitulation risks:
- and show the same levels of strength of trend as they did in December 2014, the month before capitulation, with similar levels for and lines. The + and - lines are narrrowing before the drop . This is definitely something to keep an eye on. Will there be capitulation within the next 2 months or end of bear market with gradual widening of and lines? If the and carries on playing out exactly as it did in 2015, then we might have capitulation first before the market goes range-bound
- Although is sitting close to the same area of support as in 2015, this level is currently acting as resistance
- We have similar from the 2 ATHs where the price never broke above this major until the next bull market cycle had commenced. This can mean that the next market cycle begins in May 2019 if we break above that area of resistance on the monthly charts, however, it can also mean that we have true capitulation in May 2019 if that proves to be too strong
- A close below the weekly SMA200 would be unprecedented and could induce panic
Truth is no one knows but the signals will arise closer to crunch time so I'll be updating.
Good luck and happy trading!
Weekly chart showing SMA200, horizontal support and total crypto market cap:
Inverted scale showing a potentially soft bottoming:
The knife-catching view: