LewisGlasgow

Bitcoin - Market Correction

Long
BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
I feel there is a need for another insightful post in regards to BTC /USD, today's analysis is on the 4h timeframe.

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 bullish bat 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 bat pattern 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 daily chart .


We're still in a good area of support which of course aligns with the bullish bat , 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 :)
Comment: A quick update for everyone on BTC, taking a look at the 4h chart, price seems to be pulling back to the 0.382 retracement in this extreme sell-off.


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%.

Comment: Price has now hit the 0.382 retracement level around $7300, this was accompanied by increasing buying volume as shown.


Pay attention to $6k going forward as a buying support, I'm expecting price to now level out going forward and provide clear direction.
Comment: Support established at $6k, something to add to support previous analysis.

Comment: Be aware of price stalling at $7,900 where the next resistance level is, this is where the move is likely to slow down, we'll see another decline towards $7k shortly.


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 ;)
Comment: My current view for BTC on the 15m chart.

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Comments

Bitcoin is so large that it takes days to crash and weeks to level out. I feel it will drift till 3500 and remain flat for a month. All the new money has been running scared from the market compounding loses. I'm personally loving it. Everything is at bargain prices. I've purchase bags of so many neo parts with Government backing. I'm sure My material with will go beyond anything I ever dreamed of in 8 months time. Go into fire when ordinary people run away.
+2 Reply
desil quantum.vapour
@quantum.vapour, what is the coin you buy??
Reply
LewisGlasgow quantum.vapour
@quantum.vapour, that's it, be greedy when people are fearful, be fearful when people are greedy ;)
Reply
quantum.vapour LewisGlasgow
@LewisGlasgow, I've put 90% of my fiat into this market. I'll have the second McLaren in Glasgow by November.
Reply
@LewisGlasgow hi, total hit the spot that you have foreseen, $7700-7800. Now what’s nice? A bounce to $8600 or $9200?
+1 Reply
Coke_Coke Coke_Coke
I mean today
Reply
Coke_Coke Coke_Coke
N I mean what’s next?
Reply
Thanks for the updates
+1 Reply
@welf, no problem :)
Reply
Excellent analysis, something to be admired. I tried to predicting this bullish gartley, but after seeing where priced landed, this bat looks more likely.
+1 Reply
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