Bitcoin is currently in perhaps the most critical point it has been during this entire bull run. It has technically printed lower lows and lower highs after getting rejected at the golden pocket.
There is a lot going on, both from a technical and fundamental perspective, so I will break things down one at a time.
From a technical perspective, we see that Bitcoin has been in a rising channel since February and reached an ATH of $65K in the middle of April. Near the end of April, Bitcoin printed a lower low @ $47K where it temporarily broke below the channel before quickly getting back within the channel, upon which price started to rally. The key area from that point was the golden pocket of $59-60K. Bitcoin needed to break above that zone in order to invalidate the lower low and continue the uptrend. Bitcoin spent many days retesting that level multiple times. Just as it seemed as if Bitcoin would finally break through $59K, Elon Musk's tweet sent the price of Bitcoin crashing to a low of $46K. And thus we now have a lower low, followed by a lower high, followed by a lower low, which technically means that we have entered into a bear market.
That said, I'm currently not panicking just yet. For one, the latest lower low is only slightly below the last swing low, and it is on a flash wick and not.a candle body close. If we were to close below $47-46K while we formed the lower low, then I would be a lot more concerned. The second reason is that this correction looks very much manipulated with coordinated fake FUD (Elon Musk tweeting that Bitcoin isn't good for the environment, articles saying Binance is being investigated when in fact they were assisting the authorities solve a case, etc...), and to happen at such a critical junction of $59-60K is just too much of a coincidence. During the past market tops, we only had bullish news to keep the retail investor from selling in order for the whales to cash out. So if this were the top, it would be strange for the big players to let all the retail investors know that now is the time to sell (who would buy bitcoin from them if everyone is selling?).
So thats the bull and bear summary. While I am not panicking yet, I will be monitoring the markets on a macro level very closely the next few weeks. In the immediate term, two levels to watch: 1. we need to close above $52K to get back into the channel (like we did previously). 2. on the downside, a close below 46K and then falling below 40-43K might mean this bull market is indeed over.
Another indicator to watch is how capital cycles through the market.
Two scenarios:
1. if bull market is over, we will see ETH possibly double, then the majors such as dot/ada/link go on a rally, and then the mid/small cap alts rally, all the while bitcoin is sideways/doing down slowly but steadily, and then investors cash out into USDT, and everything catches up to Bitcoin in terms of falling in price.
2. if bull market isnt over, bitcoin will start to rally alongside alts and once we cycle through the large->mid->small cap, capital flows back into btc (this is key, if capital flows to usdt instead of btc, then likelihood of bull market being over is quite high)
Hope this post provides some macro perspective and helps you to make a more rational and calm decision instead of reacting emotionally to the market volatility
There is a lot going on, both from a technical and fundamental perspective, so I will break things down one at a time.
From a technical perspective, we see that Bitcoin has been in a rising channel since February and reached an ATH of $65K in the middle of April. Near the end of April, Bitcoin printed a lower low @ $47K where it temporarily broke below the channel before quickly getting back within the channel, upon which price started to rally. The key area from that point was the golden pocket of $59-60K. Bitcoin needed to break above that zone in order to invalidate the lower low and continue the uptrend. Bitcoin spent many days retesting that level multiple times. Just as it seemed as if Bitcoin would finally break through $59K, Elon Musk's tweet sent the price of Bitcoin crashing to a low of $46K. And thus we now have a lower low, followed by a lower high, followed by a lower low, which technically means that we have entered into a bear market.
That said, I'm currently not panicking just yet. For one, the latest lower low is only slightly below the last swing low, and it is on a flash wick and not.a candle body close. If we were to close below $47-46K while we formed the lower low, then I would be a lot more concerned. The second reason is that this correction looks very much manipulated with coordinated fake FUD (Elon Musk tweeting that Bitcoin isn't good for the environment, articles saying Binance is being investigated when in fact they were assisting the authorities solve a case, etc...), and to happen at such a critical junction of $59-60K is just too much of a coincidence. During the past market tops, we only had bullish news to keep the retail investor from selling in order for the whales to cash out. So if this were the top, it would be strange for the big players to let all the retail investors know that now is the time to sell (who would buy bitcoin from them if everyone is selling?).
So thats the bull and bear summary. While I am not panicking yet, I will be monitoring the markets on a macro level very closely the next few weeks. In the immediate term, two levels to watch: 1. we need to close above $52K to get back into the channel (like we did previously). 2. on the downside, a close below 46K and then falling below 40-43K might mean this bull market is indeed over.
Another indicator to watch is how capital cycles through the market.
Two scenarios:
1. if bull market is over, we will see ETH possibly double, then the majors such as dot/ada/link go on a rally, and then the mid/small cap alts rally, all the while bitcoin is sideways/doing down slowly but steadily, and then investors cash out into USDT, and everything catches up to Bitcoin in terms of falling in price.
2. if bull market isnt over, bitcoin will start to rally alongside alts and once we cycle through the large->mid->small cap, capital flows back into btc (this is key, if capital flows to usdt instead of btc, then likelihood of bull market being over is quite high)
Hope this post provides some macro perspective and helps you to make a more rational and calm decision instead of reacting emotionally to the market volatility
