BTC: will the bottom be ~$7K?
The current downtrend, which started at All-Time High on 2017-12-17, is subject to more subjective interpretations.
- Red line: If you consider the second high on Jan. 06, 2018, then we broke out on the upside in late February (27-28 for sure, even a week before depending on how you draw the line and consider wicks and candle closes).
- Pink (tentative) line: You may also consider that the most significant price rejection happened on March 5. We'd still need a third rejection to consider this a valid .
A reinforcement of the red line (slightly adjusted, dashed red) as downtrend line is that after the late Feb. breakout, prices in March seem to validate it as support (remember: resistance becomes support once we break on the upside). There are wicks below it, but on a daily basis we always closed above.
The current price movement, down from a high at ~$11.7K on March 5 to current price (7.9K as I'm writing this), is taking us straight towards the green support . I've drawn an approximate yellow (dotted) line to show this movement.
There are two scenarios (A, B) regarding the green support that I consider very important to characterize the market:
- (A) If we stay above support, then we are still in a long-term uptrend and after such a bounce (4th confirmation of the support ), there's no way but upwards. This would be a major signal in my opinion, and we should have found a new (latest) bottom in that case. Even slowly, prices should begin making ever higher highs and most importantly higher lows.
- (B) However if we break this support, then we are no longer in a long-term uptrend. I would consider this a major signal. The bottom then becomes open to many possibilities: at $5.6K~5.9K (support range from Feb. 6 and Nov. 12-13 most notably), at ~$3K from September 2017, even ~$2K from July 2017.
In trying to assess when this check of the green support could happen, there's a narrowing time window based on current downwards (the yellow ). It could happen as early as March 21-22 at the current pace, March 24 if we keep respecting the red (former) as support, as late as April 15-16 if we stay below the tentative pink downward . Price-wise, we're looking at a $6.75K to $7.25 K range, so ~$7K is a good general idea.
My personal intuition is that scenario A is the most likely, and I would really consider a 4th check (bounce off) of the major 2017 green support as the final confirmation that we are still in a positive long-term trend. It is my interpretation of D.L.T (Digital Ledger Technologies, a.k.a. "cryptos") on a fundamental level: despite the currently speculative nature of its financial market, this tech is prone to have a massive positive impact on the world.
I think the market is torn between a financial outlook that focuses on said speculation, and essentially wants to wreck it in that regard; and a technological outlook that focuses more on the long-term, and essentially wants to price D.L.T higher, in line with NASDAQ-like techs (web, mobile, A.I, I.o.T etc.)
Though , the negative pricing we've seen in 2018 was not unwarranted in my opinion: this space needed a sanity check, as I implied in my previous TradingView idea. Conversely, on a more long-term perspective, the technology itself is good enough that this "crash", or heavy correction as I'd rather characterize it, must come to an end soon enough as well.
The next few weeks should illustrate this clash perfectly well.