BTC ... the final drop???

Hello everyone. I thought I'd start a new idea ... as this could be the final drop ... I do hate saying "final", but things are setting up for a bottom retest. Let me explain.

For over 2 months we've been stuck below 6.8k ... aside from one crazy wick due to tether devaluation on 15 Oct, which I am ignoring. Although this in itself is not really a big deal, because we've similarly held above 6k over the same time period ... we could call in neutral ... what it has done is allowed BTCUSDSHORTS to close/cover and at the moment (Nov 14) it sits close to an calendar year low. What this means is there's MUCH shorts volume free to enter ... and when the momentum gets going, there could be a significant sell off.

Secondly, this triangle wave (shown as a red ABCDE) seems to be done. We now have a big red daily candle. E wave was a bit truncated, but not by much. If we crack 6295, then it's a question of how low will it go. I see a retest of 6100, 5985, 5755 and then 5400. I would be surprised if it goes lower, and technically, it would be in free-fall below that ... breaking a 3 year old bottom trend line. Yes, we would likely stop at key points like 5k, 4.5k and 4k ... but really what I'm saying ... as much as I'd like to buy BTC at 4k ... I am trying to be realistic ... it probably won't get there, and certainly not in one go.

The other possibility is we test 6300 and then get a bounce. So far, judging by the size/momentum of the drop ... I don't think so.

Safe trading.

Remember only a fool relies on one possible scenario.

Do not use this for trading decisions, investments, financial decisions. For educational purposes only.

Note

Nice bounce now from 5860 ... but that was wave 3 .... I expect a wave 5 down. I think after that, bears will definitely try for 5755.

Note

Who's still not convinced about this drop! LOL. We have painted a new yearly low! 5678 ... it's like someone planned that, haha!

So I have entered my first long ... 5755 ... remember I have an entry strategy down to 5k ... then if we go lower, I will revisit my decision.

I am expecting us to go to 5.4k though ... the reason I entered long? Because I can never be sure, and I'd rather add at 5.4k, then stand here and miss out on a potential bottom.

Be careful people ... if you are nervous about entering, then think before you act. My long right now ... I am not stressed AT ALL. That is how you need to trade. If you are stressed, your position is probably way too big.

Note

Here's my first prediction of a 5400 bottom ... March 31st. My timing was totally wrong ... I was not as patient as I am now ... low volatility fixed that! LOL.

Let's see if it has support here, 5400 is a very important support level.

Note

OK so we hit 5432 ... pretty close to my prediction of 5400. I missed a long order by $27 ... had it set at 5405. I do have one small long at 5755, although I'm in a very small loss ... I'm still holding it, as I look to add if it goes down, and profit if it goes up.

Where to from here? I have identified 3 buy zones. The first is the highest probability, retaining support above 5200. The second is possible ... down to the psychological support of 5000, but really the third is strong and should bring in major buying ... the 0.786 fibo is in this zone and it is the bottom of the descending wedge created during 2018. If we break this wedge ... we are in free fall, yes with check points at psychological levels, but I see the next major structural support at 2981.

Here's what I'm doing. Next long order 5405, then 5005. I will possibly stop my 5755 long at 4975 ... and then re-enter this at bottom of support 3. Below BUY ZONE 3 ... everything will be stopped out, and I will wait for 3k.

Here's my updated chart:

Trade safe. You can either play major support if you know what you are doing and have a risk management plan ... and keep a cool head. Otherwise maybe sit out and wait for confirmation. Do not guess based on nothing.

For educational purposes only.

Note

We just broke a 3 year bottom trend line ... this is fundamental. As a result of this new data, it is important to consider the implications. The bigger wedge created in 2018 is now the key structure to consider. The bottom of that will likely be 4500 when we hit it.

This is my current thinking.

For educational purposes only.

Note

Sorry, quick adjustment ... fixed some technical points. I'm looking at a 4500 bottom now. Then a nice bounce to test previous low of 5755 ... shorters come in, and then BTC creates an IHS, that starts the bull cycle.

Note

Bitfinex has LOTS of buy orders at 4950 to 5200 ... lots. Buy orders to sell orders are 4:1. RSI very low. I expect a bounce at 5k.

Note

4940 so far ... this is not looking good. Someone is selling into the buy orders. Eating right through them.

Note

4855 ... dropping much faster than I expected. It is critical for the bottom of the descending wedge to hold. I thought it would take a lot longer to get there.

Note

The wedge bottom sits at 4755 ... if we break down that point, the next check point is the 0.786 fibo.

Note

This is blowing my mind. The momentum of this drop is well beyond anything I expected. I mean I had bottoms up to 2900 in mind, but not this fast. Anyone who tells you they knew this would happen either just guessed right or is lying.

Anyhow, what's important to note is we broke below the descending wedge formed all of 2018. We needed to hold 4755, and wicked to 4411. We expect a relief rally now ... it's insane to think it can go down so violently forever, without relief ... think of the traders mindset, when do shorts start getting nervous that we hit bottom and need to close? When do longs think this is bottom and want to get in? That wick to 5k has pretty much registered in every trader's mind. Finally, some relief.

But is it over? From an EW perspective, I think we just completed wave 3 ... if so, wave 1 was longer than wave 3, so wave 5 must be shorter than wave 3 (wave 3 cannot be shortest). Anyhow, depending on where wave 4 goes, it marks the absolute bottom. Wave 3 was 2200 points. If we hit 5k, 5.1k on the relief rally (wave 4), we could go to 2900 on wave 5. If we backcheck the previous yearly low of 5755, which I anticipate would be the top for wave 4 ... then we are talking about a 3500 to 4000 bottom. I don't expect wave 5 to be as violent as wave 3, as wave 4 tends to cool the bears a bit. So I'm thinking we end at 4k (for now). This chart shows the many ways it could go, but where the blue wave starts is my main idea.

Note

Unless you control the BTC market, you don't know where the bottom is. There are at least two forces (and possibly more) ... market controllers who either have decided to exit crypto, or are navigating the price are far down as possible to accumulate cheap coin ahead of a bull run (and there are probably mixtures of both types involved in this drop). There is one other subset of potential market controllers that I recently learned are shorting BTC ... miners, who are trying to hedge the drop, so they can continue to be sustainable (actually a very smart move, but they will need to cover at some point and close or enter long).

The second force is us ... the smaller guys, who all together add up to something big. Unfortunately we act on our own formed greed and fear. Some better than others. I do not attempt to say I am good controlling my emotions, I for sure have gotten better, but more like a war torn vet is better at controlling their fear of facing bullets.

All we can really talk about are key support levels:

- 2980, 2200, 2050, 1810, 900, 750, 560, 400, 350, 300, 215, 160.
- in between, there will be psychological support levels in increments of 500 as the price approaches 1000 and then increments of 100 below 1000. Those supports are considered weak (likely will only be pause points).

That's all I have folks. This drop has been FAR more violent than I expect. My EW plot would say we are finding the bottom right now, and I hesitate to say, it could be the final drop. But I don't see the signs of a major wick down and recovery. I'm worried that the entire market needs to be blown to make that happen ... as in, we have to go to something crazy low like 900. We need the longs to be squeezed in a serious way to cause a cascading domino effect. If we do hold at 2980 (which we are close to now) ... I don't see how that will be a huge wick down and up ... At this stage, a slow decline being pressurized by shorts, and then a slow rise up as shorts become convinced it's not going lower (or at least don't want to enter for the risk of it going up) ... so I see sideways for a long time until there's some fundamentally good news (BAKKT or ETF approval).

Have fun folks!

MAGICMARK

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.