Bitcoin Macro Picture: Bull VS Bear

업데이트됨

Yeah, there is a lot of info in this post so bear with me. We recently saw the breakdown from the long term support line on the logarithmic chart as predicted in an earlier post of mine. The question now is what will be the angle of the trend line we will form for our next market cycle. I have presented multiple possible outcomes. In the bullish scenario, we will retest the 4-5k region and form a higher low. However, one should observe the obvious correlations between the last two market cycles. Even the shapes of the up and down moves between the support and resistance lines are strikingly similar. This could mean that we are not even close to the bottom yet. The bottom would then be closer to 2.5k than 5k, allowing the lucky ones to buy twice as much bitcoin compared to those who bought in at the 5k region. Personally, I have been shorting and preserving my capital since the blow-off top in summer and caught the dip between 4-5k. However, I might become short biased again as the current reaction rally is looking very unhealthy. There is a lot of resistance confluence near the 8k level, from the 100 and 200 day moving averages to the 20 weekly moving average. In addition, that would be the 61.8% Fibonacci level of the current move.

Cases for the bull scenario

1) Our current bottom and hypothetical reaccumulation zone touched the bottom of many interpretations of the logarithmic regression bands. This logarithmic curve would have to be adjusted if the price falls below it.
2) It would make more sense that BTC's volatility would decrease over time. A drop to 2.5k would create a slightly higher percentage drop than the MT Gox crash.
3) We already saw quite high capitulation volume.
4) A ridiculous amount of miners would have to capitulate to break even at 2.5k, especially after the halving.

Cases for the bear scenario

1) We would get our long awaited ABC correction to the downside after a 5 wave move to the upside, satisfying the Elliot Wave Theory enthusiasts.
2) We would follow the bull flag market structure of our last cycles (thanks to Steve from Crypto Crew University for pointing this out).
3) The volume profile would match our previous cycle.
4) We would get a major crash close to the halving, similar to the last market cycle. This would punish the inexperienced investors who buy the news.
5) We had two 1D death/golden crosses in the first cycle, 6 in the second cycle and only 5 in the current cycle. This increasing number of crosses between the 50 and 200 day moving averages would imply that this market cycle will last much longer than expected.

I will closely monitor the price action when/if we retest the 5k region again.

See you in a future post!

노트

I wanted to point out that there is a possibility that the price could even go to the 9k region to fill the CME gap. This would also coincide with the diagonal resistance line. If you observe the past market cycles, the price action always created a nasty wick to retest the upper trend line before the final capitulation. Therefore, bears should be cautious and patient. My shorter term upside target is therefore 8-9k before capitulation.