What is cooking for BTCUSDBased on my understanding of INDEX:BTCUSD macro direction, this chart shows the three significant parts of the market cycle:
- Forms a low after capitulation ( due to news, potential regulations, deleveraging on exchanges etc. )
- Creates a fast and parabolic run for several months ( diminishing returns each time )
- Market falls hard after creating a significant ATH multiple times greater than the previous one
- After finding a bottom Bitcoin spends majority of the time in an accumulation stage until it reaches prior ATH.
Cycle repeats;
So far we can see only 4 cycles, if we include the current one. In the scenario the current cycle would follow the same overall market structure as seen previously, my bias would be towards the bull side of the market.
Bull case:
Currently the opinion of market participants is that we should see another leg up, with some projecting 100K, others 300K targets.
DXY may continue to lose strength towards the end of the year, allowing for BTC to gain momentum potentially.
Prices of -50% should be tempting to some bigger investors and institutions.
Bear case:
Opinion of the masses is often the wrong one - hence we could have already seen the cycle peak ;
Adding confidence to the contrarian viewpoint - the current market ATH is well aligned with the previous market peaks ( s3.tradingview.com )
From a pure technical standpoint, the current ATH had formed an area of trapped long-biased traders, suggesting that it would not come to revisit the 55K+ prices any time soon; on top of that, on the 1W chart I've noticed some time ago that there is not 1 but two extremely strong reversal patterns - Head and shoulders, together with a Double Top (within the head of the H&S). Generally on such long timeframe one pattern is a confirmation strong enough, especially of that relevance - in this case we have two, which have already been validated as well. Here are my analysis prior to the drop, I wasn't really sure it was going to play out like that but.. I guess it was time to happen anyway. ( 1/ s3.tradingview.com ; 2/ s3.tradingview.com )
Generally, those patterns hold for around 100 candles - in this case around 100 weeks before the market bottoms?
Additional confluence - Wall Street cheat sheet - the emotional blueprint seems to be playing out so far - if this is so, we are currently to see "back to normal" where 43K-45K might be the LH before the second leg down.
