WHEN WILL BTC HIT THE BOTTOM? IS THE BEAR COMING TO A CLOSE?
Since February of 2018, we have heard time and time again from the so-called "experts" that we are on the brink of the next cryptocurrency bear market. Once again, we are experiencing another dive after major news hitting the market has told us otherwise. What is really going on?
In my previous article, we discussed the announcement of the Exchange-Traded Funds (ETFs) decision on behalf of the Securities Exchange Commission. This was the most recent bit of news that was supposed to send Bitcoin into the stratosphere, straight out of the bear trend. But time has proven the news wrong once again.
After this CNBC story was released that the Winkelvoss Twins were rejected in their bid to launch the first ETF ln a regulated exchange, the market took a temporary dive after we saw a brief run to $8,000 BTC. Within a week, news broke that the Securities Exchange Commission was going to delay their decision on approving ETFs as a whole until September of 2018. Immediately after, we saw the market take a nosedive.
Experts like Alessio Rastani and others reported that they did not believe BTC would fail to drop below the major support level of $6,800, with the probability of such a dip being 20% or less. But BTC had other plans, and made fools of the prognosticators once again.
What I have noticed since February of 2018 is that no amount of news will propel the market artificially into a bull run without allowing time for the natural phases of development to carry out. After the "distribution" phase of a market, or Bear Market, I believe history has proven to us that we have to see a time of accumulation where the market settles down and lays low.
Some call this the "dog days" of the market. This is what we have seen in the entire history of the stock market, and the cryptocurrency market has reflected the same, only in much shorter time periods. After the accumulation phase, we historically see a "consolidation" phase develop before a bull market ensues.
Digging back into the history of the cryptocurrency market, I fail to see a time where we have jumped straight out of a bear market into an all-out bull run. History normally repeats itself, but past performance is not a guarantee of future events. However, as volatile as the cryptocurrency market is, I truly believe it is safest to assume that we have to see these phases of development occur before a bull run can happen.
Common sense tells me that it would take an enormous amount of money to catapult the market from a slide straight into a bull run, and it would take an even greater amount of continuous buying pressure to sustain a run. You just can't get something from nothing, and it takes a constant influx of capital to keep a market propped up.
Human nature has proven this to be right throughout history. The masses of the general investors move on emotion, and the insiders with significant amounts of money invest in a contrarian way. They play off of each other, and it's usually the general population that ends up holding the short end of the stick when they start believing news releases that make improper claims.
Looking at the current chart, we can clearly see that BTC is continuing in a bear trend after the brief run to 8,000 in late July. I don't think this is any mistake. BTC will have to find its rock-bottom point before an accumulation phase will follow. Right now, there are two possibilities in my opinion.
I could very well be dead-wrong, but we see that BTC failed a critical support level of $6800 this week, and is headed for the next support level of $6400. If BTC fails to hold $6400, we could very well see $5800 as a new possibility of the rock-bottom point. These critical support levels are shown on the chart in repeating intervals, and I believe this is due to automated trading activity.
The previous bottom point for BTC before the 2017 bull run was $5800. There is no magic to the prediction that $5800 could end up being the bottom point, because there are probably several trading bots programmed to buy big amounts at that point. Only time will tell. But it's best to assume the worst when you don't have money to lose in this market.
We will keep our eyes on the charts and watch the activity during the month of August, and carefully observe whether or not BTC finds that rock-bottom point before we enter the next phase of market development!