Bitcoin Is On The Brink: Can It Recover?

I have for a very long time stated that bitcoin and thus the whole of crypto is in a sideways trend and that it will either break down badly or go on another leg above $100,000.

Here is an example from the past, one of many I have used here to demonstrate, it’s from a long time back to underline the point:

Last week we broke down cleanly through that range:

If I had meaningful amounts of bitcoin I would have lightened up. However, I’m in ether, so I am hanging tough.

As far as I’m concerned, bitcoin will now have to prove itself again or it will now be a long harsh grind down into another crypto winter, this time between $25,000 and $30,000 a bitcoin. It is not fate but the odds are now no longer 50/50. I am now no longer an optimistic bull but a skeptical neutral.

So here is the chart now:

The current chart simply says if you are a bull, bitcoin is back in the game. To me it will have to get above $60,000 and get back into the box clearly for the old theory to be reestablished.

A bear will expect the price to roll over now and go below the previous low and if it does, even more doubt enters.

The narrative explaining this lapse is that the German government has dumped a big holding of bitcoin it had seized from criminals and that caused the slump. In addition, the Mt Gox payout is underway and this is saturating the market. This process will roll and roll as in effect a huge treasury of bitcoin is back in the market having been in lockdown for years. It will be hoovered up and we will be back in post-halving realities. However, the 140,000 BTC payout is nearly a quarter of the supply squeeze of the latest halving, but then again how many of the early adopters will simply ‘hodl’ rather than dump? In any event, those bitcoin will be out there and this is a simple explanation as to why the wheels came off earlier.

I’m not an asset diversify when it comes to crypto. Like gold, while I think it could be a great hold, crypto is just a less correlated asset in the portfolio rather than a rocket ship to investment heaven. In a way, unless you are an “end of the dollar” doomster, bitcoin has to go ‘ex-moon’ sometime and this is probably it.

However, I prefer to trade what I see, not what I think and the current situation is:

(a) Bitcoin gets back in its box, or perhaps a new diluted one, and awaits the next leg up.

(b) It rolls over in the coming days and enters the new cycle starting with a crypto winter.

A true believer will simply buy more on the fall, and why not if the bitcoin has made them a fortune from doing just that.

To me the following is the Achilles heel:

The above Google trends is “interesting.” Mainstreet has lost its BTC mania so it’s up to Wall Street to make bitcoin shine. That idea simply doesn’t work in my head.

Bottom line: Look out below.

Disclaimer: I own bitcoin, ether and other crypto.