How Long Will The BTC Run Extend Before The Drop?
It’s been over a year since my last Coin Watch update, but the season is upon us, and it’s time to get back into the crypto market with fresh technical analysis! The current action on BTC prompted me to throw together this first return post, so I hope you enjoy it and chime in with your thoughts in the comments section.
After calling the BTC low of 3100, I haven’t been as lucky calling out the action since that dip. I wasn’t convinced that the bear market was over, but now I am. The current BTC move is definitely an indication that the bear market is over.
I thought we would hit a double bottom and revisit 3100 BTC or lower, but that might not happen. The massive pump and extended rise has thrown a wrench in that scenario. But while we are on this massive unprecedented run coming out of the bear market, we can guarantee that we’ll see a hard correction within the next week or two.
Let’s take a closer look at the charts, and see what we can decipher….
It all started with the massive volume which pumped the price on that humongous green candle. Since then, we have been trading solidly along an ascending line. Now the question everyone wants to know is how long we will continue this trend before the correction comes.
It is possible that BTC could reach 6000 before correcting, but I don’t believe it will sustain itself for the time needed to reach that target. It will take around 2 weeks to hit 6000, unless we get another whale buying in that creates a massive spike.
But if we continue with what we see in this chart, I think it will reverse trend before 6000. Looking at the stochastic, we have been on the rise, as indicated by the green arrow. We’re not going to stay above the 80% line for more than a week or two without correcting. Sure, the stochastic can drop and only cause a slight drop in price, but not after staying in the “overbought” condition for an extended time period.
The next thing that draws my attention is the positioning of the candles in relation to the 5-Day exponential moving average line, and the 21-day EMA line. A bullish trend is confirmed by the faster 5-Day EMA riding high above the 21-Day line, as we see here. We typically see a peak in a short-term trend when the trading candles are floating high ABOVE the 5-Day line while it is also riding high above the 21-Day line. That gap is very telling. It’s going to close before long.
The volume spike set off the conditions that created the gap between the EMA lines, and sent the candles flying high above both. But the volume is settling down, as you can see. That’s another indication that the correction is near. Now let’s zoom in…
Here we see a big divergence taking place. The stochastic is generally trending downward. The volume is settling down, trending downward. But the price is steadily climbing, and staying above the fast EMA line. That doesn’t make a lot of sense. How long can this keep up?
I’m hearing some of the expert prognosticators saying we could continue this weird little trend for 3 to 4 weeks. While that is entirely possible, I am leaning towards capitulation of this mini trend within a week and a half. I’ll be shocked if we get anything in excess of 2 more weekly green candles.
My prediction for the correction is 3800. That’s worst-case. Most people are calling for 4200. Prior trend lines and resistance levels support either of these coming to fruition. There’s no coincidence to the fact that reversals happen on old resistance/breakout levels.
Once the correction finishes, the gates will be wide open and it will be the Running of the Bulls through the end of the year. I don’t think we will return to these levels in our lifetime, barring some big major calamity or alien invasion.
I’ll keep my eyes on the indicators and report back soon. Do your due dilligence, and remember that this is not trading advice, and I am NOT a financial professional. I’m just a plain ole regular CryptoPro who happens to be better than the great majority of people.