This is a point of great importance and indecision. Will we break out to the upside and continue the bull run or will we squeeze the overly optimistic bulls? The signals are mixed so we will have to see.
Scenario A - We break out to the upside with great volume and continue the bull run until we hit the upper range of the macro logarithmic band. We have taken out many bearish divergences on the daily time frame and we are almost at an all time high. If we do this, our market cycle top will be less impressive, maybe 150k or so. That might sound like a lot but that is only slightly higher than a 2x, which is not impressive in the world of crypto.
Scenario B - We continue correcting in a 3-3-5 structure that has been followed quite well so far. This could be a regular or expanded flat correction. If it is an expanded flat, we could actually slightly break the ATH and still come down, trapping bulls and skinning them alive. The key here is the strength and volume of the price action. Currently we have only had a 55% correction after a 17x from 3800 to 65k without meaningful Fibonacci corrections before that so it would make sense to correct more. A declining volume profile with rising price action is generally not a good sign. Also, shorts are at an extreme low. However, buying at 14-20k and selling at a then higher and later market cycle top (200-300k) would provide a more than 10-15x ROI potential, which should excite long term investors a lot more. Don't freak out if we temporarily go below the 200 week moving average. As BTC's volatility decreases, moving averages will be broken more and more often. We already closed below this moving average last time during the correction to 3800.
Whatever happens here, I am pretty confident that we have not reached our market cycle top and that this is just a corrective wave in the bigger picture. In terms of risk vs reward, it is better to sit in cash here and see what the whales decide. Missing out on a potential 10-15% move to the upside beats losing potentially more than 70% of your money if we do go down.
See you in a future post!
Scenario A - We break out to the upside with great volume and continue the bull run until we hit the upper range of the macro logarithmic band. We have taken out many bearish divergences on the daily time frame and we are almost at an all time high. If we do this, our market cycle top will be less impressive, maybe 150k or so. That might sound like a lot but that is only slightly higher than a 2x, which is not impressive in the world of crypto.
Scenario B - We continue correcting in a 3-3-5 structure that has been followed quite well so far. This could be a regular or expanded flat correction. If it is an expanded flat, we could actually slightly break the ATH and still come down, trapping bulls and skinning them alive. The key here is the strength and volume of the price action. Currently we have only had a 55% correction after a 17x from 3800 to 65k without meaningful Fibonacci corrections before that so it would make sense to correct more. A declining volume profile with rising price action is generally not a good sign. Also, shorts are at an extreme low. However, buying at 14-20k and selling at a then higher and later market cycle top (200-300k) would provide a more than 10-15x ROI potential, which should excite long term investors a lot more. Don't freak out if we temporarily go below the 200 week moving average. As BTC's volatility decreases, moving averages will be broken more and more often. We already closed below this moving average last time during the correction to 3800.
Whatever happens here, I am pretty confident that we have not reached our market cycle top and that this is just a corrective wave in the bigger picture. In terms of risk vs reward, it is better to sit in cash here and see what the whales decide. Missing out on a potential 10-15% move to the upside beats losing potentially more than 70% of your money if we do go down.
See you in a future post!