Reasons for this scenario to happen
1. The counts from the 2017 all-time high suggest that Bitcoin may have completed its wave 4 correction on February 24, 2019. If the counts are correct, then we could very well be at the beginning of wave 5, the last impulse wave to the downside.
2. We may have a for Bitcoin that leads to the downside below the 3000 level (as shown in the chart).
3. New research presented to the SEC by Bitwise Asset Management claims 95% of reported BTC spot is fake. If this research holds any truth to it, then the recent rally might just be an exit pump and therefore, a plunge of grandeur scale should not be too far away.
4. The stock market looks shaky. Bonds have rallied alongside with the stocks and that is a red flag. When Wall Street crashes, it could drag Bitcoin down with it.
The near-term outlook for Bitcoin
1. Price has failed to break above the 78.6% resistance so far. The longer price stays at current levels, the more pressure that is going to build up for the market. That said, price could still rally to the 4200s before the market flips.
2. Heavy selloff from current levels or the 4200s may see price tumble to the lower triangle support (ascending dotted ). A sustainable breach below this pivotal level would test the Weekly 200 MA support for the second time and if it falters, expect Bitcoin to sink to the mid-2000s.
The significance of 2600
1. Both the and downside triangle breakout are targeting this price level.
2. Bitcoin's last extended bear market fell 86 percent to bottom out at 152 in January, 2015. A dip to 2600 in the current bear market would mark an 86 percent correction for Bitcoin from its 2017 all-time high.
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