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Friday Inferno market report

Friday Inferno market report

Analysis

TL;DR Embrace the bear.

Crypto’s slide into the abyss continues, as Tuesday’s trading marked a low of $4,049 (Bitstamp). Since then we saw a relief rally back beyond $4,600 – all but inevitable after such a heavy plunge – and now, at the time of writing, BTC sits at $4,320. Last night it plumbed similar depths, touching $4,061.

Inferno will never give you financial advice, but we can point to plenty of evidence that we’re going lower. Just as bitcoin never finishes a bull market quietly, instead preferring an epic blow-out parabolic top, it doesn’t tend to bottom quietly either. At some point, we’re looking for capitulation: a sudden, deep spike down and back up again on huge volume. That hasn’t happened yet. It may not happen for weeks or months, but happen we believe it must.

Between now and that event – which will set up smart traders and investors for the next market cycle and possibly for life – there will be many ups and downs. In the short term, we expect a drop below $4,000 with targets in the $3,500–$3,600 range. Should that occur, it’s quite likely that we’ll see a considerable rally back up towards resistance at $5,000–$6,000, before a final leg down and end to the bear market. We’ll explore why we think that in later posts because there’s lots to it.

For now, we’re looking at support around the mid-$3,000 level. That lines up with a pause in activity from the bullrun over a year ago now and so is all we’ve got for now. As we’ve noted before, this market is wide open because the parabolic nature of the 2017 rally means that little was established in the way of support and resistance. But suffice to say it’s Black Friday, and we’re looking for a big discount on crypto today or over the weekend.

Things change on a daily basis with bitcoin, so as new information comes in we’ll be re-evaluating our position. But if we had to nail our colours to the mast, we’d say it might play out like this:

Sub–$4k (perhaps around $3,500) –> $5,000–$5,500 –> Final capitulation.

That lowest level could be $3k, it could be lower. We just won’t know until we get there.

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