Dip Buyers Should Remain Patient BTCUSD, 12K Target Still Viable
Updated
Dip buyers should continue to wait and practice patience especially since markets are a device to transfer money from the patient to the impatient, according to legendary billionaire investor W. Buffett.
Technical Analysis of Current Price Action
1. Price remains within a well-established downtrend. Price has been unable to even break the 8-day EMA as resistance at this time. Price *may* break the 8 EMA, but immediately above that lie the 21 EMA and 34 EMA, shown in blue and teal respectively.
2. Price remains below the blue trend line shown above, which is a multi-month trendline that has held since March 28, 2022. Price also remains well below the black (longer-term) trendline. Price would have to close above 26,500 in the coming days to think that the bottom has been made, and then price would have to confirm with a close above 33K-34K (above the black trendline) to think that a sustainable rally was occurring.
3. None of the key Fibonacci levels from the most recent swing high to the most recent swing low have been recouped. The one most likely to make a difference would be the .618 Fibo retracement at 26,728.69 (see golden line). If price can reach the .50 retracement of the most recent short-term decline, it will be interesting to see how price responds. The .50 retracement lies at approximately where the 21-day EMA (blue) currently appears.
Additional Comments
Since the highs in November 2021,
BTC dips have been voraciously bought by both those covering shorts and those under the spell of FOMO. A few savvy traders have likely made nice profits on these swings, and kudos to their skill and discipline, entering at key turning points and exiting when price exhausts at downtrend resistance.
In the linked article below, a target of 12,173 was discussed a couple weeks ago whenBTCUSD traded around 28K-29K. This target was provided mostly from a Fibonacci perspective. This level remains strong support in terms of both Fibonacci as well as higher time frame support at major peaks in 2018 and 2019—major monthly highs range from about 12,000 to 19,800, but 19,800 has already been broken on June 18, 2022, with a close of 17,592, well below the 19,800 peaks of 2018.
There are fundamental / macro reasons for further downside to the 12K-15K area. One expert macro-analyst commented today regarding the removal of liquidity by central banks. This analyst suggested a target of about 13,000, which coincides closely with the target below of 12,173. cnbc.com/2022/06/22/bitcoin-btc-price-may-tank-as-low-as-13000-strategist-warns.html
Lastly, momentum on the daily and weekly remains sharply negative, though it has recovered somewhat from some of the most extreme levels ever seen. Nevertheless, BTCUSD has never traded in a sustained bear market similar to the dot-com crash of 2000-2002 or the GFC in 2007-2009.
Technical Analysis of Current Price Action
1. Price remains within a well-established downtrend. Price has been unable to even break the 8-day EMA as resistance at this time. Price *may* break the 8 EMA, but immediately above that lie the 21 EMA and 34 EMA, shown in blue and teal respectively.
2. Price remains below the blue trend line shown above, which is a multi-month trendline that has held since March 28, 2022. Price also remains well below the black (longer-term) trendline. Price would have to close above 26,500 in the coming days to think that the bottom has been made, and then price would have to confirm with a close above 33K-34K (above the black trendline) to think that a sustainable rally was occurring.
3. None of the key Fibonacci levels from the most recent swing high to the most recent swing low have been recouped. The one most likely to make a difference would be the .618 Fibo retracement at 26,728.69 (see golden line). If price can reach the .50 retracement of the most recent short-term decline, it will be interesting to see how price responds. The .50 retracement lies at approximately where the 21-day EMA (blue) currently appears.
Additional Comments
Since the highs in November 2021,
BTC dips have been voraciously bought by both those covering shorts and those under the spell of FOMO. A few savvy traders have likely made nice profits on these swings, and kudos to their skill and discipline, entering at key turning points and exiting when price exhausts at downtrend resistance.In the linked article below, a target of 12,173 was discussed a couple weeks ago when
BTCUSD traded around 28K-29K. This target was provided mostly from a Fibonacci perspective. This level remains strong support in terms of both Fibonacci as well as higher time frame support at major peaks in 2018 and 2019—major monthly highs range from about 12,000 to 19,800, but 19,800 has already been broken on June 18, 2022, with a close of 17,592, well below the 19,800 peaks of 2018.There are fundamental / macro reasons for further downside to the 12K-15K area. One expert macro-analyst commented today regarding the removal of liquidity by central banks. This analyst suggested a target of about 13,000, which coincides closely with the target below of 12,173. cnbc.com/2022/06/22/bitcoin-btc-price-may-tank-as-low-as-13000-strategist-warns.html
Lastly, momentum on the daily and weekly remains sharply negative, though it has recovered somewhat from some of the most extreme levels ever seen. Nevertheless, BTCUSD has never traded in a sustained bear market similar to the dot-com crash of 2000-2002 or the GFC in 2007-2009.
Note
One member requested the longer-term Fibonacci perspective whereby wave A of the correction equals wave C. This has been posted below. Note that the Fibonacci projection "projects" the length of the first leg of the decline from the start of the second. And this target near 12K is near the 200-week SMA.Note
It's possible that this is not an A-B-C decline but a larger 5-wave decline at the larger degree of trend. Only time will tell. But an 3-wave ABC decline is the more conservative assumption, so that is what was used.
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