“2018 will be the year of crypto” was a widespread prediction in late 2017. This was symptomatic of the market wide excitement and peaking bullish sentiment that set new standards for expectations. The cryptocurrency market saw phenomenal growth across the board, in terms of prices, market participants, market capitalizations, exchanges, initial coin offerings etcetera. For bitcoin, throughout 2017 every price correction was followed soon by new all-time highs. “Buy the dip” became an almost evangelical statement. The dip buyers, together with long term holders saw their strategies rewarded. Their success stories became a crucial selling point for those new to the market.
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It's been 9 months since I posted this idea and we did see a bear market in 2018.
Many thought the 6K level would hold but it didn't. As I mentioned above, it's a crucial psychological level that was broken and the market is showing signs of despair since. It could be that this is a final capitulation type of move we are currently seeing, but my guess is we'll see a choppy market into 2019. Probably between the yellow price levels marked below. If we do break 3K, the ultimate bear scenario is in play and we may visit the 2013 top level. It could also be that we never go below 4K, but for now, bulls are showing no strength. We might see bears get overconfident though, and if you are a long term BTC bull, there is no shame in buying around the 4K USD level.. Good luck out there.
Many thought the 6K level would hold but it didn't. As I mentioned above, it's a crucial psychological level that was broken and the market is showing signs of despair since. It could be that this is a final capitulation type of move we are currently seeing, but my guess is we'll see a choppy market into 2019. Probably between the yellow price levels marked below. If we do break 3K, the ultimate bear scenario is in play and we may visit the 2013 top level. It could also be that we never go below 4K, but for now, bulls are showing no strength. We might see bears get overconfident though, and if you are a long term BTC bull, there is no shame in buying around the 4K USD level.. Good luck out there.
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We saw a bounce above 3K (for now). Entering the new year in the chop zone as projected.
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Zooming in, we are chopping along in the zone as expected.
Sentiment shifts fast and easily here. People switch from calling bottom to calling doom in a matter of hours. It wouldn't surprise me if we test 3K again.
Sentiment shifts fast and easily here. People switch from calling bottom to calling doom in a matter of hours. It wouldn't surprise me if we test 3K again.
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After some recent bullish action we saw a sharp rejection from the top of the chop zone, as the weekly closed with a large inverted hammer candle. As the market is showing some new bullish momentum over the past few weeks, this could be a shakeout before we do break out of the chop zone (above 4K). The real long term resistance is in the 5-6K range. Bulls are likely not out of the woods yet, I think a continuation of the sideways action we've seen over the past months could last well into summer (July).
A new move down, potentially forming a long term bottom around 2K is also still within the realms of possibility, although less likely given current market conditions.
A new move down, potentially forming a long term bottom around 2K is also still within the realms of possibility, although less likely given current market conditions.
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We have slowly but steadily moved up to the top of the chop zone over the past weeks again. Chart looks ready to try a breakout, meaning we could head towards 5K soon. 6K is the big one, ofcourse.
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There she is.
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Once again we are reminded of the extreme nature of this market. We broke through the 6K level like it wasn't even there and people are calling "bull is back" and "straight to 10K".
My thinking is that we still have some sideways action coming before we start to look for ATH levels. We could see a setup similar to late 2015, which would look somewhat like this:
It would mean we still have about half a year to go before a real bull cycle. I think the current move will exhaust around, or probably even before 8500$, and we retest 6000 or even lower, around 5300.
My thinking is that we still have some sideways action coming before we start to look for ATH levels. We could see a setup similar to late 2015, which would look somewhat like this:
It would mean we still have about half a year to go before a real bull cycle. I think the current move will exhaust around, or probably even before 8500$, and we retest 6000 or even lower, around 5300.
2018 started with a significant pullback in price. After a few weeks of selling action price bounced off the 6000$ area. After that price recovered quickly up to as high as 12000$. Once again, the market bought the dip:
Will the dip buyers be proven wrong this time?
My personal rule for crypto is: anything is possible. The insane growth in price that many cryptocurrencies saw in 2017 crushed most targets and expectations people had. But it goes the other way around as well. Many are currently saying bitcoin will never go below a certain price level again. To show the foolishness of such statements, let’s take a step back and look at a daily chart of 2014:
So will a similar scenario play out again? Or was the bottom found at 6000$? The truth is, nobody knows. And remember, in crypto anything is possible. Supposing we go lower from here, let’s look at some scenarios for how a bear market might play out.
First of all, we have some key levels on the way down. Roughly speaking, if we break the 9000 and 7800 levels, it is likely we’re headed for 6000 again. The 6000 level is crucial. If we bounce there again, a W shaped double bottom formation may take shape, meaning the bottom is in for the time being. This level is also psychologically important for those who bought the dip around 6000 last time. For many, reaching this level will be their final confirmation of a reversal to a bear trend, meaning lower prices are in the cards.
Elliott Wave Theory suggests we may be headed towards 3150:
So here is a general overview of price levels to watch if we get a full blown bear market. Note that it is purely a representation of potential important price levels in a worst case scenario, the timescale does not apply.
So… has the bubble popped? You could argue both a yes and no answer to that question. Personally I think the bubble talk is irrelevant. Prices overextended in 2017 and you could call that a bubble. But it will likely not be the end of Bitcoin. This is not a binary outcome scenario (yet). And to end on a positive tune - and give credit to the long term holders out there – let’s look at the tiny blip that the 2014 pullback represents on the chart today. It’s all a matter of perspective.