This is following up from my post 2 months ago where I predicted the next corrective phase to begin at $20,000, from here we experienced a market decline of 50% before price settled.
The magnitude of the correction was amplified as the entire market capitalisation dropped from $830 billion to $350 billion, which is over a 50% decline market-wide.
We've been looking for low levels to buy bitcoin throughout January, although having two successful long positions this month price is yet to find the bottom.
The current formation looks excellent, the D point holds price at a 64% correction, which is substantial given this happened within a 6 week period.
The measurements for a valid are detailed below.
B: 0.382 - 0.50
C: 0.382 - 0.886
D: 1.618 - 2.618
Final X to D: 0.886
The ratio alignment for this setup is excellent, the D point also aligns with a trend based fib-extension from A, B, C at 1.414, this is not shown on the chart.
Below is a simple overview on the .
We're still in a good area of support which of course aligns with the , to me this is a reversal zone worth watching.
To add, I'm using a logarithmic scale instead of the standard linear scale.
Keep this setup on your watch list :)
Following the first decline from $20k price returned back to $16,400 at the 0.618 retracement, followed by a re-test at $17,200.
Since price dropped below $10k it has been causing a market-wide panic, you can see price is consistently pulling back to the 0.382 retracement followed by a further decline.
Whenever you are in a strong trend, the 0.382 reversal is a good indication that price will continue trending until the support or resistance level is broken and we experience a larger pullback.
What's even more interesting is the average decline in each stage throughout this correction is around 40%.
Pay attention to $6k going forward as a buying support, I'm expecting price to now level out going forward and provide clear direction.
From there we will see the market level out, I don't see any reason for price to drop another 75% for those indicating a $2k buy level... But again, in this market, anything is possible ;)
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