TL;DR Bitcoin rekt, alts ded. Just another day in the crypto bull market.
When bitcoin broke resistance and took another run at the yearly high, it was looking very promising. $13k fell, and it looked like BTC might manage to take out the $13,880 level where it had stalled last time – which also happen to be the golden fib level, from the top of the bubble to the bottom of the bear market.
It was not to be. Instead, we got what looks like a double top, and a sharp slide in the price of bitcoin afterwards. BTC didn’t get any higher than $13,200 this time, a lower high, and plummeted to $10,967 late on Thursday.
That’s a 17% crash, which is significantly less than the 31% fall we saw immediately following the year high at $13,880. However, the move may not have finished playing out. The parabolic rise has been set for a reckoning. We may have seen it already, with those two corrections – 31% and 17% are serious by any normal standards. We did bounce off the 21-day exponential moving average, which has happened repeatedly in this bull run and in previous ones.
If not, then keep an eye on the 21-week exponential moving average and the 100-day simple MA, which have often proven strong support in previous bull markets and in this one. That could see bitcoin going much lower – back down below $10k and potentially into the $8k zone. Right now, however, bitcoin is trading well above its recent lows
There may be a parallel in the November-December 2015 correction. A similar pattern played out then. Bitcoin rose from near its low around $230 in a parabolic move that saw it hit $500. It made a 40% correction to around $300, not so different to the 30% correction we saw at the start of this month. It then recovered; weekly RSI double-topped above 70, as it just has again, as bitcoin made a lower high, as it just has again. There was a second major pullback, though not as large as the first – this time about 22%. That again matches the pullback this time, which is around half as much as the first. After that, BTC went into yet another parabolic rally and sharp correction, and ultimately began its long climb to $20k.
History doesn’t repeat, but it does rhyme, and when patterns like this play out again they’re worth paying attention to.
Alts have been feeling the pain, with many falling hard against BTC as BTC falls against USD. Dominance is now over 65%. In other news, Binance has launched margin trading, and the SEC has approved its first ever STO – both bullish developments in the sector as a whole. And, of course, we’ve had the insanely bullish news that Donald Trump is against bitcoin. You’ll be hearing more from us on that soon.
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