Bitcoin: where is the end?
Updated
How was your weekend? Hope you had some fun. At least, bitcoin did. That’s what we’re gonna be talking about today.
You might be confused. We had inverted h&s, cup and handle, adam and eve bottom, it felt like SEC has almost approved the bitcoin ETF, consensus pump was ready to take us to 20k in a week and 6 of June was your last opportunity to buy below 10k. What could go wrong? I explained it in my previous post.
Now, as we entered a downtrend we want to understand where we are likely to bottom.
Of course no one really knows where it is going to be and the only support that can’t be broken is 0. Fundamentally value of bitcoin is hard to determine, so we can end up anywhere on the chart. But we will make an assumption that the price of bitcoin will continue moving in the same direction long-term (up) because there are no active catalysts that can change it at the moment.
1. Historical trend lines
We know that bitcoin as any other market respects trend lines and when they’re broken resistances turn into supports and vice versa. This is an example from the previous bubble:
It takes a lot of effort to push through a support like this. Taking into account that the market is not even close as impulsive as it was in 2014, odds are green line will hold and the red one won’t be touched:
In 2014 there were also 2 resistance lines and the bear market was neutralized when we broke through the second one. If we were trying to make an analogy it would be reasonable to assume that now the bear market will also be over when we break the second trend line.
2. Levels
If we take fib retracements for the whole move from 200$ to 20000$ price turns out to respect them. For example, two last rallies fell of 12k and 10k – both are fib levels. 0.786 retracemenent is usually a level where the price retraces after a big move before continuing going to it’s longer term direction.
Also, I plotted several swing failures that I think are important supports.
50, 100, 200 weekly moving averges are known to be important:
So, they’re on my chart, too.
3. Now..., there has been a lot of talk about the symmetrical triangle and it’s definitely a very powerful structure, but the way you determine a target can be hard controversial, especially when bitcoin ends up to be worth less than 0 in some cases. Here is how I measure the target for a symmetrical triangle in this situation:
4. Psychology
We already see that shorts are rising and by the time we get to 4-5k the majority of the traders will probably turn bearish again. Perfect time for big players to load up on their longs with kind retailer’s liquidity. Long/short ratio likely to get to short squeezes trend line by the end of June (exactly when December futures close):
As you can see there are basically 2 price clusters where the most valuable supports coincide, it’s 4,3k-4,9k and 2,9k-3,5k. What I’ve noticed is that the bitcoin bubble bursts start getting less painful over time, so I really doubt that we’ll break through 4K.
Good luck.
You might be confused. We had inverted h&s, cup and handle, adam and eve bottom, it felt like SEC has almost approved the bitcoin ETF, consensus pump was ready to take us to 20k in a week and 6 of June was your last opportunity to buy below 10k. What could go wrong? I explained it in my previous post.
Now, as we entered a downtrend we want to understand where we are likely to bottom.
Of course no one really knows where it is going to be and the only support that can’t be broken is 0. Fundamentally value of bitcoin is hard to determine, so we can end up anywhere on the chart. But we will make an assumption that the price of bitcoin will continue moving in the same direction long-term (up) because there are no active catalysts that can change it at the moment.
1. Historical trend lines
We know that bitcoin as any other market respects trend lines and when they’re broken resistances turn into supports and vice versa. This is an example from the previous bubble:
It takes a lot of effort to push through a support like this. Taking into account that the market is not even close as impulsive as it was in 2014, odds are green line will hold and the red one won’t be touched:
In 2014 there were also 2 resistance lines and the bear market was neutralized when we broke through the second one. If we were trying to make an analogy it would be reasonable to assume that now the bear market will also be over when we break the second trend line.
2. Levels
If we take fib retracements for the whole move from 200$ to 20000$ price turns out to respect them. For example, two last rallies fell of 12k and 10k – both are fib levels. 0.786 retracemenent is usually a level where the price retraces after a big move before continuing going to it’s longer term direction.
Also, I plotted several swing failures that I think are important supports.
50, 100, 200 weekly moving averges are known to be important:
So, they’re on my chart, too.
3. Now..., there has been a lot of talk about the symmetrical triangle and it’s definitely a very powerful structure, but the way you determine a target can be hard controversial, especially when bitcoin ends up to be worth less than 0 in some cases. Here is how I measure the target for a symmetrical triangle in this situation:
4. Psychology
We already see that shorts are rising and by the time we get to 4-5k the majority of the traders will probably turn bearish again. Perfect time for big players to load up on their longs with kind retailer’s liquidity. Long/short ratio likely to get to short squeezes trend line by the end of June (exactly when December futures close):
As you can see there are basically 2 price clusters where the most valuable supports coincide, it’s 4,3k-4,9k and 2,9k-3,5k. What I’ve noticed is that the bitcoin bubble bursts start getting less painful over time, so I really doubt that we’ll break through 4K.
Good luck.
Note
Screenshot:Note
This is how I see it:Note
Shorts going parabolic even on a log scaleNote
longs/shorts, how far can it go?Note
getting closerNote
The key here is not to fomo for the price to go down
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