In the very immediate term we may see a bounce or retrace half of this drop and put us around $6850, but I don't expect buyers to push this much higher. My assumption here is that we're heading to test the prior low at ~$6k before we see a proper bounce where bulls are likely to defend the narrative of a .
Overall mid-term picture looks very . I would not be surprised to see another capitulation move in the next couple months to the $4300-$4900 range if $6k does not hold, with G20 coming in July and all the FUD that will surround it, i foresee us dropping. I would expect large buys in this price range and this will be a profitable range for traders. A return to mean would put us in the low $4k range by year's end.
We need to cull the moon shills, unsustainable projects and people waiting to drop bags off before a proper move up is possible. Long term I'm on crypto, but with G20 around the corner, and so many alts that have no need for a blockchain sitting at multimillion market caps, a cutdown is needed.
Right now it's difficult to see this mid-term trend changing without new capital in the form of renewed interest from retail buyers or the ingestion of institutional money if/when that happens. This is all just market cycles. In the interim, the crypto space will continue to mature behind the scenes - I still see this space in its infancy, and if/when the next bubble comes it will ride on the back of a more mature usability layer in the form of easy payment systems knit into the existing IOT framework which will go a long way in demystifying crypto and showcasing its practicality.
The biggest question is where we go next. I posted yesterday that I’m expecting more downward movement following the daily pennant breakdown. I still hold that view, but I’m a little surprised by the length of sideways we’ve had. We’re in a bear flag (sort of–pretty flat), but volume profile fits. We’ve chopped here sideways long enough to reset RSI on the small-medium time frames. Still oversold on 2H-1D, but room to drop on the shorter frames and the weekly. That said, I do expect we’ll be retesting 6900-7000 at some point. We moved through it without a second glance. Doesn’t mean we will–we very well could leg down again and test 6700 as support-turned-resistance.
All eyes should be on 6400-6500. This is a relatively HVN for this range, historical support, and our last low. Breaking below that would be very, very bearish. I’m holding my shorts (5x 40% from 7505 on June and 2x 50% from 6810 on swaps) until 7K breaks with confidence.
The LONGS:SHORTS ratio has narrowed, but I still don’t think we’re in substantial danger of a short squeeze. Further, I’m failing to see any particular reason for a reversal. I’ve been blowing that horn since we got rejected off 11.7K, but I just don’t see it yet. I think it will come, but I don’t think it’s going to be this summer. As always, I try to evaluate what the market is doing through the lens of the current environment, sentiment, and fundamentals. I see no compelling argument for BTC being worth what it’s worth that doesn’t begin with “It will be worth so much more later.” I’m optimistic that the environmental changes necessary to facilitate adoption will occur and that BTC will be worth so much more later, but I’m a trader, and I can substantially increase the number of coins I hold for that eventuality without committing additional fiat. Why would I not? Also note the use of optimistic rather than confident–I am not confident of that outcome, and I advise anyone who wholly believes that BTC will succeed to take a step back and evaluate the possible outcomes.
Good luck all.