There’s absolutely no way we have seen the bottom. $6K support for Bitcoin will break, and here are a few simple reasons for that:
- During this year dumps first started leveling off, but the last two were extreme again;
- We have started dwelling on support with bounces taking their time, unlike the first two. If the market was keen to reverse, we would have been testing the upper trendline instead. That trendline has been rejecting decisively;
- This giant triangle is coming to its resolve, uncertainty is at ATH, and it’s easier to nudge the market in your desired direction.
This basic picture tells me the triangle will break down, but it could be either way. As we approach the critical point, the market is polarizing. Some public figures are calling the bottom; crypto twitter is full of bullish sentiment; others are cautious or downright bearish.
In the times of uncertainty, it’s much easier to swing the public to either side. Now imagine you are a significant market participant that exited on the bear market confirmation. It’s very likely that Bitcoin will repeat their historical cycle, and the next bull market will be larger than we imagine.
There’s absolutely no way you would miss the opportunity to accumulate on the cheap right now. What is the best way to do that? Use the uncertainty to nudge the market into your bids. I’m not saying that $6K is not enough, but $3-4-5K would be much better.
This is the first time some market participants manage billions of dollars. It will not take a lot to breach the critical support at the right moment. It’s not even clear that the market wouldn’t break down on its own.
But aren’t we in the danger of being stuck sideways for another year then? I think we are not. Too much money sitting on the line, too much attention, too much infrastructure being built. The next cycle will be different, may be too large. The last cycle Bitcoin was too fragile, and it was really the last time it could die.
During this cycle, Bitcoin captured serious attention in the financial world but is still barely big enough for institutional investors to consider. How on earth do you miss the chance to accumulate something that goes directly after the markets for gold, and then bonds, and then investment real estate, and then offshore money, etc?
The answer is simple — you don’t. Risk/reward is too crazy to ignore.
But oh, that bullish divergence on 4H, sure.