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The crash came, were you surprised?
After having seen the insight from this chart in the last post it seemed clear that Bitcoin was/is heading for a bigger correction. But as I pointed out last time it is still not completely clear if we are heading straight to 22k or if there will be one more bigger push upwards. Even after the market mayhem yesterday there is still a chance for a bullish reversal. Although it is unclear how much momentum that would have.
The reason I am not ruling out the bullish reversal scenario is that we still haven't made a lower low. The pattern is still bullish with a new higher high established in November and a higher low established yesterday. Obviously we can only call it a higher low once there is an actual trend reversal (on other words a green weekly candle). But at least there is a potential for that to happen. If yesterday prices dropped below 28k, I would officially call this a bear market.
Bitcoin often surprises everyone at the moment when the majority thinks a certain trend has been established. The current narrative is that we are in a bear market. But what if price now goes up and breaks the resistance at ~42k? Everyone would turn bullish again. So it's best not to swim with the mass mentality.
The support at 29k was almost a certainty with an obvious trend line established over several years. You can see it better in this chart:
I pointed to this in in the post "will we have a 100k bitcoin summer?" and you can see the chart here once again:
So let's revisit the current probabilities which are in my opinion most likely. The blue path outlined above has been falsified which still leaves us with the purple and green ones. I think we can state with relative big confidence that if prices can't move up and break out above ~42k Bitcoin will be heading for ~22k which is the strong support coming from the orange trend line (see first chart as well). It will very likely not drop further and therefore start the next bull cycle (which is earlier than in previous cycles).
However, as stated Bitcoin often surprises everyone by doing the opposite of what people expect. For this reason I am still pointing to the bullish reversal scenario seen here in purple. There are quite a few hints that this would be at around 100k, but it would come later than I first argued as I thought that we would see it for this summer. Instead, it would transpire at around fall.
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
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