Bitcoin has been sideways trading since June of this year after a mighty fall from levels approaching $70,000.
I have been calling this crash for a long time and been clearly taking the position that the $20,000 level was not the end of the crash and that there would be another leg down toward perhaps below $10,000. My favorite bottom target has been and remains $13,000.
Here is the chart as I write:
It’s a breakdown and that is an extremely high probable move for a big drop towards $10,000.
This is the sort of trajectory a bear will see:
This is what a capitulation would look like:
It tends to be that in a crash market there is a moment of maximum pain and grief when prices dive to extreme lows for short periods that defines the bottom.
Is this in play?
I think it is a strong possibility because the FTX/Binance situation (Binance is buying FTX) is likely to set off an avalanche of consequences that will play out in the coming days.
If this is the last leg down it will not be the time to pile in, it will be the time to start “dollar cost averaging.”
There are plenty of liquidity crunch potential situations which a crash will rupture in the days and weeks ahead so it is unlikely to have a V-shaped recovery.
Remember “not your keys, not your crypto.”
Live changing amounts of crypto needs to be in your hands not in a platform that might fail. These failures might simply be from contagion, so don’t be weak, get your crypto safe.
In the aftermath you can slip back in and put your crypto back on surviving platforms. If we are in the last leg, counterparty risk is going to be the thing to watch out for.