Possible Bearish Long Term Trend Breakdown
Updated
Even though the current BTC price action looks extremely bullish and almost everyone in the community is currently losing their minds, I cannot help but think that this could still be a potential bull trap until we confirm otherwise. What you have to keep in mind is that it is extremely probable based on historical price action that we are not following a parabolic trend. Many smarter people than me have already demonstrated this. Instead, we are most likely following a logarithmic recession curve. So, it is mathematically impossible that we will continue the same rate of growth forever. Therefore, the only question is how steep this recession curve is and where exactly we are in relation to it. As we can see, we already broke down from a previous trend line in the 2014 bear market. I do not think that we would be able to follow the same trend line that was established by that bear market and continue to grow as aggressively. So, we could still have a reaccumulation zone that is slightly lower than what everybody is expecting. This is supported by the hypothesis that every new market cycle seems to take longer than the previous one.
The 6.4k bottom seems fishy due to the lack of volume in that range. We are able to observe extreme and sustained surges in volume during the previous pivotal points in the market like the 20k top, 3k, bottom and 14k top. The 6k range had very little volume compared to the previous examples so I do not see how it is possible that smart money and whales with very deep pockets completed their final accumulation in that range. I could very well be wrong so let's see. I want to see some higher highs created on the weekly and monthly time frames before I become bullish.
The 6.4k bottom seems fishy due to the lack of volume in that range. We are able to observe extreme and sustained surges in volume during the previous pivotal points in the market like the 20k top, 3k, bottom and 14k top. The 6k range had very little volume compared to the previous examples so I do not see how it is possible that smart money and whales with very deep pockets completed their final accumulation in that range. I could very well be wrong so let's see. I want to see some higher highs created on the weekly and monthly time frames before I become bullish.
Note
I also want to point out that the trend lines are relatively subjective and you could argue that we already broke down from that line depending on how you draw it. The point however remains that any possible trend lines you can draw are becoming less and less steep compared to previous ones.Note
Looks like I was correct. This is a beautiful buy zone in terms of the historical pattern we have seen so far. We are at the bottom of our logarithmic recession band. Loaded up heavily at crazy levels including 4k.
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