Omicron, Evergrande, Fed tapering and other FUD occasionally conspire to cause chaos in financial markets including crypto. Unfortunately, while maturing as an asset, bitcoin remains far from being the “flight to safety” bitcoin maxis want it to be.
But while recent events and the latest plunge to $42K appear on the surface to be random, the chart tells a very different story.
Back in April a weakening overhead curve structure (shown in pink) combined with the breakdown of a bearish ascending wedge (seen in first box) to result in a 55% drop from $65K to $30K levels.
This played out again on a smaller scale in September after hitting horizontal resistance at the $53K mark and retracing to around $40K.
Things looked promising after breaking through both horizontal and curved lines and making new all time highs, however as you can see in the third box BTC was again telegraphing a major upcoming correction.
Using this clue on 19 November I drew out a replay of the price action which followed the April drop and sat back to watch. 15 days later as if on cue, BTC collapsed to $42K.
So where to from here? The fact it has now played out the first section of the previous pattern gives us confidence that this correction will resolve in a similar way. That means a choppy move sideways until the middle of January before the next strong move up.
Buckle up.
But while recent events and the latest plunge to $42K appear on the surface to be random, the chart tells a very different story.
Back in April a weakening overhead curve structure (shown in pink) combined with the breakdown of a bearish ascending wedge (seen in first box) to result in a 55% drop from $65K to $30K levels.
This played out again on a smaller scale in September after hitting horizontal resistance at the $53K mark and retracing to around $40K.
Things looked promising after breaking through both horizontal and curved lines and making new all time highs, however as you can see in the third box BTC was again telegraphing a major upcoming correction.
Using this clue on 19 November I drew out a replay of the price action which followed the April drop and sat back to watch. 15 days later as if on cue, BTC collapsed to $42K.
So where to from here? The fact it has now played out the first section of the previous pattern gives us confidence that this correction will resolve in a similar way. That means a choppy move sideways until the middle of January before the next strong move up.
Buckle up.
Comment:
Prediction continues to playout. I expect a few days to consolidate and build some strength and bullish sentiment back into the market before the next phase up. Let me know what you think.