Is Bitcoin about to collapse to $20k ??

Updated

Maybe.

A lot of PM’s asking me where the bottom is. Believe it or not, I'm not an oracle.

From a recent high of straight to 47k, impressive. What’s next?

This is where zooming out matters. Overall my bias is certainly bullish. However I’m not doing myself any favours without looking at the bearish. All TA should be balanced.

There’s a lot going on, on the above 2-week chart. Including:

1) The ‘incredible sell’ alert @ 62k. I’m asking myself some very serious questions later about why I ignored that!

2) The bearish divergences, my goodness there’s 10 oscillators printing bearish divergence on the 2-week chart!

3) AND a possible Elliot wave 4 correction to 20k.

The blue horizontal lines - Look left 2013 compared to 2021, everyone is talking about how this cycle is a carbon copy of 2013.

1) A ‘incredible sell’ alert, just like today.

2) Price action came down to test the 21-week / 2-week chart EMA. Just like today.

3) Those bearish divergencies though… price action must simply not close below until December 20th. No if’s no buts.

The Elliot wave structure -

Not going to deny, it’s perfect. A correction to 20k would be very healthy structure overall. A test of the last market high as support has not yet occurred.

Price action would also test pi-cycle support (yellow dotted line) just as it has done previously.

The log growth curves - (not shown here)

The growth curves are an excellent indicator of market tops. That has simply not happened yet.

For the curves to remain intact price action must close on or above 60k by late December.

What do you think will happen?

WW

Note

The Gaussian channel interaction with price action during this cycle I don’t see much discussion on TV.

Shown below are 1st, 2nd, and current bull markets on the weekly chart. Most concerning in this chart is the frequency price action has tested the upper side of the channel. If a candle body closes inside the channel in the coming weeks, Bitcoin WILL enter a bear market. Look left. A weekly close under 45k will cemment that future.

It could be argued (purple circles) price action interacted with the channel in a bull market before. However these touch points were very early in the respective cycles. Therefore perhaps we can deduce the same we’re super early in a significant uptrend.

Then there is the dreaded ‘M’ pattern in price action. You never want to see that after a significant uptrend, it is almost a certain reversal indication. Only 21 months ago Bitcoin was at 4k. 1500% later we are all calling for higher highs.

Lastly that fiendish pi-cycle top alert appears at the same time this interaction with the channel is occurring.

The signs are all here.

WW

Note

PS: If this is happening to Bitcoin, Gold will be the same, they're be no escape.

Note

How’s this for doom? Multiple bearish divergences with price action versus the oscillators.

At the top of the previous cycles 6 oscillators printed bearish divergence. With 70% and 50% corrections to follow. Will this time be different?

Okay that’s enough of the doom WW. Would anyone like to see a bullish scenario? It’s rather good…

Trade closed manually

Closing this one. Why? After some hours of study, more than I care to count, studying multiple time frames, various oscillators, taking a pause to go Christmas tree shopping, studying overlays with price action, counting down the days to the next full moon, I've come to the solid decision there is absolutely no chance this target will be met. But we had to ask question.

The probability of a upside move is now significant.

Note

What a different 30 days makes. As mentioned above 'the signs are there'.

Will open this idea again should:

1) The 0.618 golden ratio fail (40.7k as near as I can tell) is the line in the sand.

2) The 72-week EMA fails (pink line).

The rising wedge pattern on the weekly prints a beak out with extension to 25k.

I've no idea where these extra Bitcoin tokens are coming from, on-chain data continues to show a increasing outflow with shrinking exchange reserves. There's obviously an unrecorded quantity somewhere.

Note

The rejection from the area invalidated one of the statistics that allowed me to close this idea. That's unfortunate.

A March 2020 events remains on the cards until price action gets above 52k. If it does occur, it will be short lived as before.

Trade active

** open buy orders @ 22k **

While demand for Bitcoin continues to grow and depletion of exchange reserves increase, many many short terms holders (wallets from 2021) are to selling into loss.

On the TA price action is skipping across the 600-day SMA (red line) like a stone on water. It is only a matter of time before it breaks. It was until around Mid-May.

Don't try and short this, better have a buy order open.

If you're a long term holder there's nothing to do, let the volatility play out, ignore the flush out of weak hands, the market will recover as quick as it falls not un-similar to March 2020.

Note

Price action has broken below the 3-day / 600-day moving average (red line).

Look left... every time price action fell below this moving average AND printed a candle body under on the 3-day chart, price action corrected a minimum of 50%.

Two things..

1) IF by April 28th a new candle body is printed under this moving average, do expect a correction to 20k area.

2) IF (1) happens, this will be the best buying opportunity of your lifetime.

3) If you're long term holder, if ignore all of this. From history it is clear these corrections are short lived with price action recovering to the correction point a few weeks later.

Are there swaths of people that just don't want to hold Bitcoin?

Is Elon funding is Tweeter share purchase by selling his BTC?

Who knows.. it is not important, the market needs to flush out those weaker hands.

Note

** Target update, ** Yup, you read that correctly.

Why? Spent an hour or two following through the arguments made in the original post. It is so utterly difficult to invalidate them. In fact, if anything, the case made is stronger today than it was then. Whilst am bullish, I can't ignore the bearish case.

To get to this target exchange inflow needs to increase dramatically, which on-chain data does not support at this time. The alternative means is a large leveraged liquidation event. Unfortunately on-chain data does not capture the number of Bitcoins held on leveraged exchanges as collateral.

Is anyone holding tens of thousands of Bitcoin as collateral? Yes. Hundreds of traders are using BTC as collateral including Saylor himself, 1000's of MicroStrategy Bitcoin is purchased with debt. That debt must be repaid if price action keeps falling, you can already see how easily a mass liquidation event could occur.

From Forbes last month regarding Saylor's collateral:

"The three-year loan was collateralized with about $820 million in bitcoin, representing about 12% of MicroStrategy's overall cryptocurrency holdings; deal terms require at least $410 million worth of bitcoin to be held in collateral, assuming that the full principal of $205 million remains."

source:
forbes.com/sites/jonathanponciano/2022/03/29/billionaire-saylors-microstrategy-takes-on-205-million-loan-to-buy-more-bitcoin-as-experts-eye-50000-price/?sh=14ce922e4685

It seems to me incredible that someone so wealthy can be equally so reckless. This is bravado on steroids.

MicroStrategy stock is effectively a Bitcoin ETF now... a sell signal did print on the 10-day MS chart (was not aware of at the time or I would have published a short idea) and the stock is currently projected to drop a further 50%. This can only happen if Bitcoin price action drops an equal amount!

Ja.. time will tell, but the pieces are starting to fall into place. If MS collateral is dumped on the market at any price, we may see the targets all too easily too quickly.

Note

Almost there, to go to first target. Will see how 20k acts for the 2nd target.

Long positions from 20k are very safe. The next market top shall be just over 600k per bitcoin sometime in 2025. Yes, 18 to 30 months from now. Will explain why at the end of this month.

Note

PS: The target really only happens depending how long price action hangs around 20k. Saylor will have to liquidate 250m worth of Bitcoin at 21k price level, thereby pushing the market down further.

Don't do leverage people.

Trade closed manually

Finished. Over to the bulls.

Trade closed: target reached

I know I've already closed this idea. But I thought it was such a good 'target reached' close it was worth doing twice.

without_worries

BTC
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Weblink: patreon.com/withoutworries

Allow 3-6 months on ideas. Not investment advice. DYOR

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