BTC - The recent drop might actually be bullish...
Bitcoin's recent drop may turn out to be a good thing for the bulls...
Bitcoin had been humming along nicely for much of the year, with very few pullbacks/drops in sight.
Then the other day the bulls got a rude wake up call.
Bitcoin dropped over $1,000 in less than an hour.
It marked the second largest hourly decline (in dollar terms) ever for ol bitcoin.
However, what if that drop could actually be a good thing for bulls?
It may sound counterintuitive but that drop could actually end up being a good thing for bullish momentum...
(Source: https://twitter.com/SilverBulletBTC/status/1230814233924898816)
Why do I say that?
Well, for one, all you have to do is check the latest bitcoin news feed to see that the bears are now out in full force again, claiming that lower lows are now coming.
I've been seeing things like; the top is in, short this bloated pig, and brave for more pain etc etc etc...
https://beincrypto.com/3-things-remember-bitcoin-market-sour/
Basically the sentiment is shifting to a point where short sellers are now feeling confident enough to pile back in, and that is the good news.
There is an old phrase in the stock market that goes something like "stocks tend to climb the wall of worry".
Which means there needs to be a healthy dose of skepticism and fear out there for stocks to go higher.
This happens because short sellers get squeezed and em pushing prices higher.
When everyone is bullish and sentiment is as good as it can get, there is no one left to take the other side of a trade, everyone is already on the same side.
(Source: https://todaytrader.com/blog/short-selling-stocks/)
With price action like we saw the other day, short sellers have now piled back in...
As we inch higher we are going to start squeezing some of them out.
And, ss they hit the buy button to close out their position it is going to push bitcoin even higher, which will cause more shorts to have to cover.
The end result likely being that bitcoin goes even higher than it was before basically due to the fact that it had this dip that trapped a bunch of short sellers.
That is exactly why sometimes scary drops like we witnessed can actually be good news for bulls as we move forward.
Stay informed my friends.
-Doc
No History, No Pattern sticks to BTC :) From here, what would you think, the price will be going ?
I think we could see a little dip here, but then I think we are going higher. Overall I think bitcoin breaks $20k this year. most likely a couple months after the halving.
Makes sense. What an intuitive and counter-intuitive business trading is. You need to be not one but two or more steps ahead in your thinking and strategy it seems.
Yes the overall trend is bullish now at this point in the cycle, and this dip of almost 10% in an hour is nothing too unusual. And these dips definitely make for a healthier and sustainable climb, as you have explained in more technical detail here.
Trapping shorts is often the name of the game in order to keep moving higher.
I dare say that BTC is still in a strong bullish cycle that'll keep riding upwards until Halving. The biggest challenge so far is conquering the 5-digit mark, with $10,000 being a tough barrier to crack. Still, the recent drops is indeed a good thing, as the bulls will need to take a breather before going higher.
Until halving?
The largest moves are usually seen post halving. Though, those gains usually don't really get going until several months post halving.
Agreed! What I meant was that there will be a steady rise until Halving. I expect there to be a correction during, and briefly post-Halving, though this certainly doesn't invalidate the bullish momentum. Once that correction passes, and as you've said, the rally will start again a few months post-Halving.
Here is the weekly chart of BTC
Seems to have broken the downtrend, but each attempt is forming a lower high, which is bearish.........Time will tell.
Posted via Steemleo
I see it as a broken downtrend, then some throwback towards the downtrend line expected, followed by a resumption of the move up.
I don't think it goes below 8,900, it also seems to struggle to break through the $ 9,360.