Behind The Scenes Part 2 (Bitcoin & Altcoins): 40K, 33K or 26K?
Updated
Good morning ladies and gentlemen, more than 30,000 Bitcoins have been transferred to Binance earlier today...
In a previous article, we mentioned the best case scenario and the idea of ignoring the worst case scenario, this can be a mistake. The truth is that Bitcoin, the Cryptocurrency market, tends to surprise, always, either on the bullish or bearish side. Regardless of what happens, it is always wise to consider all scenarios.
The altcoins are correcting below our baseline, which we defined as the price level at which these projects traded around January 2024. The truth is that most altcoins are going back to October 2023 price levels. This is the same price at which the market traded before the major 2023/24 bullish wave; after the long consolidation phase.
Some altcoins did even worse and went lower to break below their June 2023 low and others broke down even further, including big and highly recognized projects, and crashed below their May/June 2022 low reaching new All-Time Lows. Bitcoin is currently trading at the same price it traded back in April/March 2024; very high by all standards.
The higher it trades, and the longer it takes to drop, the stronger the strength of the bearish move. This is called bearish consolidation, which in turn is a distribution phase. The distribution phase is termed so because the big players and large Bitcoin holders distribute their coins to the rest of the market.
Just as a long six months bullish consolidation (accumulation) phase led to a massive bullish rise. In reverse, a long six months bearish consolidation (distribution) phase can lead to a massive bearish crash.
Bitcoin grew just like certain altcoins, it did better than most. Only a few projects grew more than Bitcoin in terms of previous past action. Meaning, only a few projects moved to hit new All-Time Highs. It was Bitcoin and these few. The rest produced a strong wave in late 2023, others minimum growth.
While we know and assume that Bitcoin isn't likely to crash as the altcoins, because of its size and fame, look what happened to Ethereum... And Ethereum is gearing up for another round of the same. The same dynamic where Junk-base is buying billions of Ether to sell to Spot ETF holders at a low price continue. They are accumulating to sell en-mass.
Hope for the best; prepare for the worst.
The best scenario puts Bitcoin at $40,000 as the correction bottom. This can easily still be true.
A stronger correction would send Bitcoin lower toward the $33,000 - $36,000 price range.
A doom scenario and things getting really bad, for whatever reason because things tend to develop always as a surprise, would be Bitcoin between $33,000 and $26,000 on a wick. $26,000 is the price at which Bitcoin traded in October 2023, which is before the final impulse that led to our newest and latest All-Time High of $73,777.
Regardless of the general perception, such a move wouldn't change much in how Bitcoin continues to grow and evolve in the long-term. This can happen if some unforeseen event hits the market. Also because we have about 3 weeks of continued bearish action, which is plenty of time for everything to show up. The least expected scenario is always the one that comes to pass.
There is always good news... The stronger the correction, the stronger the recovery that will follow.
The stronger the panic, the stronger is the lesson that the market participants will learn.
The bigger the shock, the stronger the market reaction and after the recovery happens, more confidence in the system develops and everybody will know for certain, forever that Bitcoin is here to stay.
I am not saying that we will necessarily see 26K but, prepare for the worst... Just in case.
Namaste.
In a previous article, we mentioned the best case scenario and the idea of ignoring the worst case scenario, this can be a mistake. The truth is that Bitcoin, the Cryptocurrency market, tends to surprise, always, either on the bullish or bearish side. Regardless of what happens, it is always wise to consider all scenarios.
The altcoins are correcting below our baseline, which we defined as the price level at which these projects traded around January 2024. The truth is that most altcoins are going back to October 2023 price levels. This is the same price at which the market traded before the major 2023/24 bullish wave; after the long consolidation phase.
Some altcoins did even worse and went lower to break below their June 2023 low and others broke down even further, including big and highly recognized projects, and crashed below their May/June 2022 low reaching new All-Time Lows. Bitcoin is currently trading at the same price it traded back in April/March 2024; very high by all standards.
The higher it trades, and the longer it takes to drop, the stronger the strength of the bearish move. This is called bearish consolidation, which in turn is a distribution phase. The distribution phase is termed so because the big players and large Bitcoin holders distribute their coins to the rest of the market.
Just as a long six months bullish consolidation (accumulation) phase led to a massive bullish rise. In reverse, a long six months bearish consolidation (distribution) phase can lead to a massive bearish crash.
Bitcoin grew just like certain altcoins, it did better than most. Only a few projects grew more than Bitcoin in terms of previous past action. Meaning, only a few projects moved to hit new All-Time Highs. It was Bitcoin and these few. The rest produced a strong wave in late 2023, others minimum growth.
While we know and assume that Bitcoin isn't likely to crash as the altcoins, because of its size and fame, look what happened to Ethereum... And Ethereum is gearing up for another round of the same. The same dynamic where Junk-base is buying billions of Ether to sell to Spot ETF holders at a low price continue. They are accumulating to sell en-mass.
Hope for the best; prepare for the worst.
The best scenario puts Bitcoin at $40,000 as the correction bottom. This can easily still be true.
A stronger correction would send Bitcoin lower toward the $33,000 - $36,000 price range.
A doom scenario and things getting really bad, for whatever reason because things tend to develop always as a surprise, would be Bitcoin between $33,000 and $26,000 on a wick. $26,000 is the price at which Bitcoin traded in October 2023, which is before the final impulse that led to our newest and latest All-Time High of $73,777.
Regardless of the general perception, such a move wouldn't change much in how Bitcoin continues to grow and evolve in the long-term. This can happen if some unforeseen event hits the market. Also because we have about 3 weeks of continued bearish action, which is plenty of time for everything to show up. The least expected scenario is always the one that comes to pass.
There is always good news... The stronger the correction, the stronger the recovery that will follow.
The stronger the panic, the stronger is the lesson that the market participants will learn.
The bigger the shock, the stronger the market reaction and after the recovery happens, more confidence in the system develops and everybody will know for certain, forever that Bitcoin is here to stay.
I am not saying that we will necessarily see 26K but, prepare for the worst... Just in case.
Namaste.
Note
This is not it, yet. The monthly Bitcoin chart shows what is truly possible: The descending triangle is breaking down and the confirmation happens only at the monthly close.
We will look more deeply at the monthly chart but it shows, as it is now, that below 40K is actually an easy target...
Note
Bitcoin's weekly chart shows a full rejection which makes this setup extremely bearish. The fact that the week is only halfway through is also negative: Since EMA55 was pierced already and the bounced led to a lower high, this means that EMA89/EMA144 will be tested next (minimum) as support. The low 40Ks is basically confirmed once the weekly session closes at current levels or lower.
Note
The DXY has gone bullish, today. This is the first time the DXY turns bullish since June 2024.
The DXY and Bitcoin, the Cryptocurrency market, have an inverse correlation.
➖ When the DXY goes bullish, Bitcoin goes bearish.
➖ When the DXY goes bearish, Bitcoin goes bullish.
Seeing the downturn in Bitcoin happening at the same time the DXY goes bullish only reinforces this negative correlation.
Bitcoin's chart is already bullish, but this is another signal to take into consideration.
It is still early and anything is possible, but everything is pointing down.
Namaste.
Trade active
It is on... Less than two weeks left for the major showdown.
No more time to prepare, we are already in the process.
Almost 6 months of warning before the major crash. Plenty of time to take action.
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