BTC
ETH
XRP
BCH
LTC
Change theme

Friday Inferno market roundup

Friday Inferno market roundup

Analysis

TL;DR a strong bounce – but is it a dead cat or the start of something better?

 

On Wednesday, bitcoin finally ended its incredible run-up after putting in a high of $13,880, dropping as low as $11,241 at one point in a $2,500+ crash. This correction was much needed, since bitcoin was badly over-extended and any further gains would simply have led to a sharper correction – damaging confidence and ultimately prolonging the next stage of the rally. Yesterday saw another drop, this time to $10,300.

 

The pullback occurred just above the 61.8% fibonacci retracement level, as measured from the top of the 2017 bubble to the bottom of the 2018 bear market. This key fib level lies around $13,400. At the time of writing, bitcoin is trading at $11,300 – a $1,000 bounce from the bottom.

 

As we have discussed in previous market reports, $12k is a very significant area since it represents the last major support level before $20k; the market crashed so fast in early 2018 that there was little price discovery and significant support and resistance levels were not established. The only other rough levels we have are fib retracements (61.6% at $13,400 and 78.6% at $16,100), and the round numbers of $15,000 and $20,000 – also the all-time high. Bitcoin has respected other resistance levels so little over the past three months that we cannot assume these will slow any further rise.

 

Trading below around $12k, then, we can expect a ranging market that might go as low as $10k without any real cause for concern. Bitcoin needs to consolidate, after its 300% increase on the year so far. Consolidating above $12k would be very bullish.

 

But there is another critical question to resolve. Was the drop in price simply an overdue short-term correction, or – according to Elliott Wave theory – the start of a longer corrective second wave in a five-wave bull market? Should that be the case, though, we can expect significantly lower prices – perhaps $8k or even $6k – before the uptrend resumes. The third, upward wave tends to be the strongest and longest in a bull market, before another corrective wave and then ultimately the fifth wave, which is characterised by FOMO and a blow-off top. This is something that won’t become clear for a while, since we would expect this to play out over several weeks at least.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on

Our crypto-chat: https://t.me/hellabovecrypto
Telegram: https://t.me/crypto_inferno
Twitter: https://twitter.com/CryptoInferno_
Facebook: https://www.facebook.com/CryptoInferno/
Medium: https://medium.com/cryptoinferno

Leave a Comment

avatar
  Subscribe  
Notify of

Hottest Bitcoin News Daily

Social

Twitter

Onecoin Fugitive Cryptoqueen Allegedly Paid $50 M to Lawyer to Launder Funds
https://t.co/8aDIXjLiS0
#onecoin #bitcoin #altcoins #blockchain #crypto #cryptocurrency

Load More...