Bitcoin bears bite back
When I did my last bitcoin technical analysis five days ago, we had just seen price drop to the 55 MA on the daily chart for the first time this year. It was a particularly bearish move. Little did I know that this was just the start as price has today just dropped below the next support at the 100 MA on the daily chart. This makes for a 25% correction since the ATH at $64.8k.
With price currently below the 100 MA, we still have most of the day to go before the candle closes, so there it time for a bounce back above this support line. However, with price currently below $50k once more, we are in uncertain territory. These retracements over the past 8 days are unprecedented this year, and it looks like April is the major bearish month of the year so far, despite the ATH 8 days ago.
Naturally all the altcoins were dragged down in the price correction and are currently sitting at what look like bargain prices. But since we don’t know where this major correction will end, who can say what the real bargain will be? Naturally it is a good opportunity to buy the dip – yet again - and add to your stack for the long term.
With bitcoin dominance bouncing today at 50% (according to TradingView charts), it looks like we are still in the altcoin season. Will today’s bounce mark a turnaround? The chart showed a spike back up to 54% and currently sits at 52.5% so I am buying bitcoin as well as some alts right now. I’m adding to my favorite altcoin stack as well as my bitcoin holdings for the long term.
Since the bull market is still set to continue all year, this is just another short term retracement and it will pay to buy these dips and add to the portfolio now. I believe that we are only half way or perhaps even a third of the way through the bull market cycle for this phase and any buys now will result in long term profit by year end.
The next possible support below us right now is at $42.5k region, which acted as support during the March correction, and was resistance back at 8 January. To think that we are back at February prices and almost back at January levels is quite astounding, especially since we all think it’s the bull market and prices have actually been going way up all year. This April slowdown has been noticeable though by comparison.
On the weekly chart we have an absolute bottom technically at the 21 weekly MA, which coincidentally also sits right at the same previous support I just mentioned around $42.5k. Traditionally this 21 weekly MA is the bottom for a bull market cycle, and if price goes below it then we are in serious bearish territory long term. So in my opinion we won’t go any lower than that 21 weekly support this year. If we do then the bull market is over, according to traditional TA, and I doubt that will occur this year.
With rumors abounding of the China miners getting knocked out by their power crisis, thus affecting the hash rate, there is much speculation regarding the reasons for this correction. That being said, a 25% dip is nothing too unusual, so I’m not too concerned. We may have just lost $300 billion from the crypto market cap, putting us back below $2 trillion, but that’s the natural cyclic nature of the cryptocurrency market.
I will become concerned if price breaks the crucial support at the $42k region as mentioned, but until then I’m still bullish and will buy any further dips that arise. This is just my opinion of course and not financial advice. It’s a great day to scoop up some cheap alts and DCA, adding to the long term holdings.
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