How Low Can Bitcoin Go??
Yesterday, we published an analysis of Ethereum (see linked idea). We turned to historical data to extrapolate where we may find a min bottom. This article was very well received, so we decided to repeat our analysis on Bitcoin.
Everyone knows that the crypto market is particularly susceptible to booms and busts, more so than the traditional markets. The intensity of the exuberance is matched only by the devastation of the crashes. The current FUD with crypto has everyone wondering where it will bottom out. We don't have a crystal ball, but can turn to history for ideas. As capricious as the crypto market is, one constant is historical price action.
Let us turn the clock back to December 2017. Everyone was amped for 18K Bitcoin and we were anticipating 20K easily with some analysts predicting BTC prices as high as 2M or more. January was a rude awakening and the beginning of a winter that lasted several years. That aside, the technical analysis on BTC during that time period is very telling.
After its peak, Bitcoin obviously cratered, but it hit several key Fibonacci levels on the way down. Most notably, it crashed to the 0.236 level, at about 5.2K (first red circle). We subsequently bottomed out further, before a slow ascent back to 10K, then another breakout. By analogy, the crypto market appears to be in a similar trend. Same analysis, different numbers.
This time, Bitcoin has topped out just shy of
65K, and has tumbled into the 30K handle. The fact that we have been maintaining these prices for so long suggests that this is not a mere correction but a sustained selloff. Looking back at the price action of 2017 we see an almost identical cycle. This cycle, the equivalent 0.236 Fibonacci level is aroudn 18K, which coincides conveniently with the former all time high of BTC from 2017.
The 18K handle might be tough for bulls to swallow, but we must turn to history in times of uncertainty in the crypto markets.
TL;DR: Our technical and historical analysis suggests that 18K is a lower bound for BTC
Everyone knows that the crypto market is particularly susceptible to booms and busts, more so than the traditional markets. The intensity of the exuberance is matched only by the devastation of the crashes. The current FUD with crypto has everyone wondering where it will bottom out. We don't have a crystal ball, but can turn to history for ideas. As capricious as the crypto market is, one constant is historical price action.
Let us turn the clock back to December 2017. Everyone was amped for 18K Bitcoin and we were anticipating 20K easily with some analysts predicting BTC prices as high as 2M or more. January was a rude awakening and the beginning of a winter that lasted several years. That aside, the technical analysis on BTC during that time period is very telling.
After its peak, Bitcoin obviously cratered, but it hit several key Fibonacci levels on the way down. Most notably, it crashed to the 0.236 level, at about 5.2K (first red circle). We subsequently bottomed out further, before a slow ascent back to 10K, then another breakout. By analogy, the crypto market appears to be in a similar trend. Same analysis, different numbers.
This time, Bitcoin has topped out just shy of
65K, and has tumbled into the 30K handle. The fact that we have been maintaining these prices for so long suggests that this is not a mere correction but a sustained selloff. Looking back at the price action of 2017 we see an almost identical cycle. This cycle, the equivalent 0.236 Fibonacci level is aroudn 18K, which coincides conveniently with the former all time high of BTC from 2017.The 18K handle might be tough for bulls to swallow, but we must turn to history in times of uncertainty in the crypto markets.
TL;DR: Our technical and historical analysis suggests that 18K is a lower bound for BTC
Join my discord at discord.io/quantguy
Publicaciones relacionadas
Exención de responsabilidad
La información y las publicaciones que ofrecemos, no implican ni constituyen un asesoramiento financiero, ni de inversión, trading o cualquier otro tipo de consejo o recomendación emitida o respaldada por TradingView. Puede obtener información adicional en las Condiciones de uso.