Is BTC’s Short-Term Bottom In Yet? (Weekly Forecast)

Bitcoin has bounced back a bit so far this week, bouncing off the 50 Week EMA and rallying to the 78.6% fib around $38K mid-week. Depending how Bitcoin responds from here, this relief rally could solidify a bottom, or set the stage for another test of the lows.

(June 2, 2021 8:30PM EST)

Short-Term

Bitcoin’s approaching an inflection point in which it will either rally to a short-term higher high or get rejected and continue lower to retest the lows. Either way, we’ve just experienced an enormous (>50%) correction, so we’ve likely seen the majority of the downside action already. When you zoom out, you can see Bitcoin is still in a long-term uptrend and bull market, so we continue to approach this situation with a BTFD strategy. Compared to the current ATH at $65K, Bitcoin is nearly 50% off. If you believe in the commonly-cited Stock-to-Flow Models or Pantera Capital’s price projection, Bitcoin could go another 3–10x from here within the next 6–12 months.

This selloff resembles that off 2013 when Bitcoin had an early-cycle rally to new highs, sold off dramatically, consolidated for a while, and then rallied to exponentially higher highs months later. This is not an uncommon occurrence in markets, especially in crypto, which benefits from volatility as well.

BTC Dominance

Where are we?

Now that a week or so has passed since the major selloff and capitulation bottom, we can reasonably plot this pattern. The initial drop to $47K was the “Bull Trap,” the subsequent rally to nearly $60K was “Return to normal,” and the following $20K drop to just under $30K was capitulation/despair. That puts us now at “Return to the mean,” a typically slow and boring period of prolonged consolidation while buyers begin another period of re-accumulation and confidence slowly returns to the market.

Long-Term

BTFD. Fundamentals have not changed. Daily and even weekly charts will show relatively large corrections; this is standard bull market behavior. Now that another altseason has been spectacularly squashed, this sets us up for another Bitcoin leg up to new highs, likely $75K+ and higher. By nearly every measure, we are nowhere near a top; in fact, we are maybe halfway through this bull market. What do you do during bull markets? Buy. The. Dip.

Support: 50 Week EMA at roughly $33K, then 100% fib at $30K.

Resistance: $40K, $45K, then $50K.

Originally published at https://www.publish0x.com.