BITCOIN - BOTTOM IS JUST AROUND THE CORNER !!!
The digital asset market has experienced the first significant pullback since the rally throughout January, retracing from a weekly high of 23.5k to a low of 21.5k. Some highlights of the week come along with significant regulatory news coming out of the US, such as Kraken being fined for their staking services, legal action against Paxos' issuance of BUSD stablecoin, and litigation amongst crypto banking partners and payment providers.
____________________________________________________________________________________________________________________________________
WHERE ARE WE AT?
We are currently at a transitional phase of the trend where price action has stabilised between 18k - 23.5k. Although there was a rough time BTC traded below 18k, the move was lack of volatility in terms of price action and volume intensity during November 2022 til early January 2023.
One of the most remarkable highlights for the last 8 months is the accumulated trading volume of historically >56 million coins being exchanged (on Binance). This is the highest cumulative trading volumes of all time ever being clocked during bottom-out. This is also a signal that sell side is exhausted amongst high conviction buyers.
1. BROAD RANGE OUTLOOK - COMPLETING WAVE C
Looking at a broader view, it has been bearish throughout the last 2 years since Bitcoin topped at 65k in late April 2021. The impulsive move from late July 2021 (30k zone) to a new ATH in December 2021 (69k) was nothing more than just a Wave B move from our perspective with weak buyer's conviction and high seller's demand. The price action was then left with the entire 2022 dedicated to completing Wave C, with the cycle baseline of the trend lies upon 28k - 30k mark.
The move of Wave C also consists of a First Fractal Wave from 69k down to 35k (in early 2022) then a Third Impulsive Fractal Wave from 48k down to 17.5k (in June 2022) and ultimately finishing off with a Fifth Short Fractal Wave from 22k down to 16k (in November 2022). Of course, such events like LUNA stablecoin de-pegging or FTX insolvency also played a major role in sell pressure and caused significant pain within the crypto community and devastation amongst those who held assets in such platform. This is sadly a domino effect, and de-leveraging event that was eventually going to happen. And as usual, Bitcoin and its community will bounce back stronger.
2. MID-TERM PRICE FORMATION - INVERSE HEAD & SHOULDERS
As aforementioned, we are in the transitional phase in which price action could not break any lower 16k - 18k due to the sell side exhaustion but not enough momentum to fully escape 23.5k - 24k, YET. This has become a significant zone for long-term investors slowly pile up their stack and a great opportunity for newbies to grasp Bitcoin at a seemingly undervalued price tag.
With the resistance at 23.5k - 24k and two price drawdown spikes on mid-June 2022 and 4th quarter 2022, Bitcoin has slowly created a formation of inverse head&shoulder. Alongside with the significant pullback from 23.5k - 24k, we are witnessing a right shoulder emergence IF Bitcoin does not retrace any lower than 16k.
SUMMARY
Two years is long enough to test anyone's patience yet payoff will come to those who persistently believe in the asset. The Bitcoin has experienced numerous ups and downs, absolute euphoria and complete capitulation then "rejuvenation" over its volatile 14 years history. And this time, IT WON'T BE DIFFERENT !!!
____________________________________________________________________________________________________________________________________
WHERE ARE WE AT?
We are currently at a transitional phase of the trend where price action has stabilised between 18k - 23.5k. Although there was a rough time BTC traded below 18k, the move was lack of volatility in terms of price action and volume intensity during November 2022 til early January 2023.
One of the most remarkable highlights for the last 8 months is the accumulated trading volume of historically >56 million coins being exchanged (on Binance). This is the highest cumulative trading volumes of all time ever being clocked during bottom-out. This is also a signal that sell side is exhausted amongst high conviction buyers.
1. BROAD RANGE OUTLOOK - COMPLETING WAVE C
Looking at a broader view, it has been bearish throughout the last 2 years since Bitcoin topped at 65k in late April 2021. The impulsive move from late July 2021 (30k zone) to a new ATH in December 2021 (69k) was nothing more than just a Wave B move from our perspective with weak buyer's conviction and high seller's demand. The price action was then left with the entire 2022 dedicated to completing Wave C, with the cycle baseline of the trend lies upon 28k - 30k mark.
The move of Wave C also consists of a First Fractal Wave from 69k down to 35k (in early 2022) then a Third Impulsive Fractal Wave from 48k down to 17.5k (in June 2022) and ultimately finishing off with a Fifth Short Fractal Wave from 22k down to 16k (in November 2022). Of course, such events like LUNA stablecoin de-pegging or FTX insolvency also played a major role in sell pressure and caused significant pain within the crypto community and devastation amongst those who held assets in such platform. This is sadly a domino effect, and de-leveraging event that was eventually going to happen. And as usual, Bitcoin and its community will bounce back stronger.
2. MID-TERM PRICE FORMATION - INVERSE HEAD & SHOULDERS
As aforementioned, we are in the transitional phase in which price action could not break any lower 16k - 18k due to the sell side exhaustion but not enough momentum to fully escape 23.5k - 24k, YET. This has become a significant zone for long-term investors slowly pile up their stack and a great opportunity for newbies to grasp Bitcoin at a seemingly undervalued price tag.
With the resistance at 23.5k - 24k and two price drawdown spikes on mid-June 2022 and 4th quarter 2022, Bitcoin has slowly created a formation of inverse head&shoulder. Alongside with the significant pullback from 23.5k - 24k, we are witnessing a right shoulder emergence IF Bitcoin does not retrace any lower than 16k.
SUMMARY
Two years is long enough to test anyone's patience yet payoff will come to those who persistently believe in the asset. The Bitcoin has experienced numerous ups and downs, absolute euphoria and complete capitulation then "rejuvenation" over its volatile 14 years history. And this time, IT WON'T BE DIFFERENT !!!
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.