We are in unprecedented times right now with everything going on. With the world in upheaval, I want to layout 2 scenarios so we can look at some possibilities of what BTC COULD potentially do. What I think it will do if we were to moon or go down further.
The BULLISH Case.
The bull case is that Bitcoin is forming a massive continuation pattern as indicated in the chart to the right. We came down and found support on the long term trend line and are moving accordingly. What needs to happen is BTC needs to find some stability and an indication that BTC has indeed found a bottom. If this is the case we could either rally or continue sideways. It's important to note that when BTC halved last time in 2016 we pulled back afterwards. This would go in accordance with this scenario. We would either rally or move sideways in the halving, pullback and stabilize through the rest of the year before starting to rally once again when the purple downward trendline is broken and the blue trendline holds as support. the critical thing here is we need to hold above $7,000 for a sustained move up and we need to do that for quite some time. This isn't to say we couldn't dip to 6k or chop around but that when it starts really going we will look for a hold above $7,000.
*One of the scenarios that could have played out which i wrote about was that we would get a massive surge with the recent market rally and the FED printing money. While we did get a rebound we have not seen any follow-through which makes the case for a massive upside play sooner less likely.
Depending on what happens, for the bull scenario to really play out we need a sustained breach of $7,000 and more stabilization with everything going on.
the BEARISH case.
The bearish case is that Bitcoin has in fact already broken it's long term downward trendline and is merely doing a bear market rally or retest according to the log chart. If this is indeed the case and BTC can't hold it's recent $5,000 support level, it could lead to things getting a lot worse before they get better. This scenario gets more credence with the world currently in the state it's in. With unemployment claims surging to 22 million in the United States and Chinese GDP contracting for the first time in 20+ years to -6% it strengthens the case that we will get another waterfall effect and gives the potential to head down much further. People will be demanding fiat to pay bills, feed their families, etc... Since Bitcoin still hasn't permeated the masses yet to demand payments in BTC, this is bearish for BTC.
What to do?
A hard question. since everyone has their own risk tolerance and no one has a crystal ball, you need to manage your risk accordingly. It's prudent to trim your risk assets in order to pay rent and buy food, prop your business up, etc...
A way to look at it:
If you own $100,000 worth of BTC and your cost basis was at $9,000. Right now that leaves you with $77,000 currently if we take a $7,000 BTCUSD price.
if you sold off half and converted $38,888 to cash, that leaves you with 5.55 BTC.
If you did the above and the bullish scenario plays out you can :
A) possibly buy back or;
B) Lets say it moons from here and goes to 10k or even 20k.
If BTC goes to $10,000 you will come just shy of break even with your USD coming back to roughly $94,000. If BTC goes to $20,000. You will now have $149,500. Or a net gain of 49.5%
If you did the above and the bearish scenario plays out you can:
A) possibly buy back.
If you have 5.5 BTC in the market and have $38,500 in cash and you buy at BTC $2,500. You will now have 21 BTC at an average cost at $3,666 per BTC. A great long term position
B) take the cash completely out, you have saved yourself a lot of money and mitigated your risk.
A lot to think about and a lot to consider. Assess your risk tolerance and make the decision of staying in the market, trimming your risk or moving to cash accordingly.
Are you BULLISH or BEARISH?
Best of luck,
-Sherem
The BULLISH Case.
The bull case is that Bitcoin is forming a massive continuation pattern as indicated in the chart to the right. We came down and found support on the long term trend line and are moving accordingly. What needs to happen is BTC needs to find some stability and an indication that BTC has indeed found a bottom. If this is the case we could either rally or continue sideways. It's important to note that when BTC halved last time in 2016 we pulled back afterwards. This would go in accordance with this scenario. We would either rally or move sideways in the halving, pullback and stabilize through the rest of the year before starting to rally once again when the purple downward trendline is broken and the blue trendline holds as support. the critical thing here is we need to hold above $7,000 for a sustained move up and we need to do that for quite some time. This isn't to say we couldn't dip to 6k or chop around but that when it starts really going we will look for a hold above $7,000.
*One of the scenarios that could have played out which i wrote about was that we would get a massive surge with the recent market rally and the FED printing money. While we did get a rebound we have not seen any follow-through which makes the case for a massive upside play sooner less likely.
Depending on what happens, for the bull scenario to really play out we need a sustained breach of $7,000 and more stabilization with everything going on.
the BEARISH case.
The bearish case is that Bitcoin has in fact already broken it's long term downward trendline and is merely doing a bear market rally or retest according to the log chart. If this is indeed the case and BTC can't hold it's recent $5,000 support level, it could lead to things getting a lot worse before they get better. This scenario gets more credence with the world currently in the state it's in. With unemployment claims surging to 22 million in the United States and Chinese GDP contracting for the first time in 20+ years to -6% it strengthens the case that we will get another waterfall effect and gives the potential to head down much further. People will be demanding fiat to pay bills, feed their families, etc... Since Bitcoin still hasn't permeated the masses yet to demand payments in BTC, this is bearish for BTC.
What to do?
A hard question. since everyone has their own risk tolerance and no one has a crystal ball, you need to manage your risk accordingly. It's prudent to trim your risk assets in order to pay rent and buy food, prop your business up, etc...
A way to look at it:
If you own $100,000 worth of BTC and your cost basis was at $9,000. Right now that leaves you with $77,000 currently if we take a $7,000 BTCUSD price.
if you sold off half and converted $38,888 to cash, that leaves you with 5.55 BTC.
If you did the above and the bullish scenario plays out you can :
A) possibly buy back or;
B) Lets say it moons from here and goes to 10k or even 20k.
If BTC goes to $10,000 you will come just shy of break even with your USD coming back to roughly $94,000. If BTC goes to $20,000. You will now have $149,500. Or a net gain of 49.5%
If you did the above and the bearish scenario plays out you can:
A) possibly buy back.
If you have 5.5 BTC in the market and have $38,500 in cash and you buy at BTC $2,500. You will now have 21 BTC at an average cost at $3,666 per BTC. A great long term position
B) take the cash completely out, you have saved yourself a lot of money and mitigated your risk.
A lot to think about and a lot to consider. Assess your risk tolerance and make the decision of staying in the market, trimming your risk or moving to cash accordingly.
Are you BULLISH or BEARISH?
Best of luck,
-Sherem
הערה:
The question right now should not be, will Bitcoin go up? But, will Bitcoin NOT go down if the stock market collapses again?
הערה:
Hitting our purple trend line and reached $10,000 in resistance. just 4 days off the halving, I would expect a pullback from these levels.
הערה:
Also divergence showing as well -
