Some TA on Bitcoin's current price, at least my perception of it, while trying to remain relatively neutral and realistic. Instead of looking first at the Weekly chart that most are focusing on, here is the 3 Day chart.
Price is currently at the 0.236 retracement level "line in the sand" since the 2020 lows to the 2021 highs. This is where we saw consolidation in late 2020, so not unsurprising to see a bounce from this previous resistance zone. The positive here is the same as the negative imo. There is a big volume gap between $20K and $30K. Likewise, there is a big gap between $17.5K and $12K. Even zooming out further, there isn't much more volume until $12K.
Note: I should of used Coinbase chart to reference volume, as there is a lot more of it between $30K and $40K than on Bitstamp.Based on volume alone, it won't be difficult for price to re-test $30K if $20K is reclaimed. Likewise, it wouldn't be difficult to reach $12K if $17.5K support is lost, despite how oversold price currently is. I personally don't understand much fixation with the $14K or $15K level, to me they appear to be of little trading interest. More relevantly, a so-called "typical" 83% correction would be $12K, not $14K or $15K.
While the Weekly chart does factor in increasing volume from $19K to $12K, this is based on buyers from over 4 years ago. Personally, I think these buyers either already panic sold into the bear market in 2018, otherwise took profits in 2021, or plan to hold for the long-term. At least the
hold waves shows that these buyers remain relatively neutral at present, with instead the 1-2 year buyers beginning to capitulate or take very late profits (those who bought between $10K and $65K, but predominantly $10K).
Fortunately shorter-term on the 4hr paints a similar picture to that of the 3 day chart, that of a big volume gap between $21.3K and $28.3K, with local resistance around $21K. Short-term support appears to now be $19K after the bounce from $17.5K, with falling below $18K likely to signal further downside and confirm today's price action as just another dead cat bounce.
With
unrealized losses currently reaching 19% yesterday, this does appear to be a time to be optimistic rather than pessimistic based on historic data, even if price can capitulate further.
I honestly think this is either one of the "generational buying opportunities", or the moment where Bitcoin faces a longer bear market than ever seen before as the stock market collapses further, and economies go into deep recession. But so far, I don't see an argument for any of these scenarios, even if they remain possibilities. This is also what capitulation "feels like" and the reason for such high fear in the market.
This does otherwise look similar to the 2018 bear market in one respect. Price bottomed out between $3K and $5K which was a mid-point of consolidation in the 2017 bull market. Currently, $17.5K to $20K could be considered a mid-point, if we consider the rally to have started in 2020 @ $10K, as opposed to from $20K. Similarly, back in 2018 there was a big volume gap all the way down to $1K when price reached $3.2K, but fortunately this was never tested. Instead, price rebounded to $6K (and beyond) as there was a big volume gap back to that level. By that point, most had accepted that a new bull run had started.
My personal benchmarks for this type of reversal would be the following:
1. Closing today above $20K (roughly 10% below the 200WMA which wouldn't be a disaster). Ideally above $21K consolidation, but can't be too hopeful.
2. Closing next week above the 200WMA (which will be $22.4K next week). Reclaiming $20K would likely achieve this I think, especially $21K.
3. Then trading towards $25K the beginning of next week, before a correction, in order to close June comfortably above $20K.
