Keep in mind that Bitcoin has a long history of shooting straight up in the air, and then collapsing.
- The BTC/USD has bounced just a bit during the trading session on Tuesday, gaining about 2.5% by midday.
- It’s also worth noting that the market is looking very likely to form a descending triangle.
- If we break down below the bottom of this triangle, it opens a move down to the $15,000 level.
The $15,000 level is a psychologically important figure, but I think we probably slice right through that given enough time. After that, then it opens the possibility of a move down to the $12,000 level. Keep in mind that Bitcoin has a long history of shooting straight up in the air, and then collapsing. We are during a significant collapse, but this time it’s a bit different in the sense that a lot of the money that has been in Bitcoin was institutional in nature. The institutions don’t like these types of markets, so now the question is whether they will reenter.
See Rallies as Selling Opportunities
I suspect that there probably will be institutions willing to get involved in Bitcoin in the future, but it won’t be the mainstream ones. The damage that has been done to the crypto industry over the last 6 months cannot be underestimated, and I think now that this bubble has popped, you are going to see a lot of frauds and losers disappear. This is what we continue to see time and time again, with plenty of places to point fingers at. The most obvious one of course is the FTX exchange, which has turned out to be part fraud, part money-laundering scheme, and the part cult of personality. This is how all bubbles and, the tide rolls out and we all see who’s wearing clothes to quote Warren Buffett.
At this point, any rally is a selling opportunity, with the $18,000 level being an obvious resistance barrier. The 50-Day EMA sits just above there as well, so that’s another reason I think the technical traders will be paying close attention to it. I do not believe that the market is going to recover any time soon, and I would anticipate a move down to the $12,000 level where we start to churn, perhaps entering an accumulation phase that may take a few years to play out. Bitcoin is dead now and is not coming back until the Federal Reserve fails it out via loose monetary policy.
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