Is Bitcoin Just Biding Time?
Bitcoin and cryptocurrencies have taken it on the chin lately. This is nothing new and we have seen it many times before. The corrections in this space are deep.
The total market capitalization of cryptocurrencies peaked just below $3 Trillion in 2021 but has now shrunk below $1T.
The OG, Bitcoin has the largest market cap at $380B and is the most widely watched and quoted in the space.
Regardless of your outlook or opinion on cryptocurrencies, they can be great trading vehicles if you can stomach the volatility and position size appropriately.
So, let's take a look at Bitcoin's past corrections to see if we can come up with any clues as to when it might find a bottom.
Since 2013 Bitcoin has suffered three major corrections. We are currently experiencing the third right now.
How long did it take Bitcoin to get back to a new high? Well, the last two corrections it took more than 1,000 days after it sold off more than 80%.
Since topping out above $60K Bitcoin has sold off about 75% and this correction has taken over 500 days. So, another 500 days and it should be at a new high? Well, anything is possible but because it's impossible to know for certain it's just something to note.
More importantly, the recent low of $17.5K and the round number $20K is an important area to watch as it was the high set in 2017 before being taken out in late 2020.
Will this area now serve as support? The bulls sure hope so, especially Michael Saylor who just keeps on buying into the hole.
If the price of Bitcoin can hold above the recent low and start to move higher it could mark a low for this corrective phase. If not price could easily see $10K again.
Another thing worth watching is the broken correlation between tech stocks and Bitcoin. There's now a large gap that I think could close if tech stocks (QQQ) can continue to hold up or even better, start to move higher and extend this bear market rally.
This might be the "risk-on" catalyst that Bitcoin needs to get moving higher again.
SIGN UP HERE to receive Profit From Trends Free directly to your inbox once a week.
Follow me on Twitter @gregrieben
Nothing in this blog post should be considered investment advice and is provided for educational and entertainment purposes only. The commentary and information represent the opinion of the author and are not recommendations to buy or sell any security or investment product. The author may or may not hold positions in the securities and investments mentioned. Full disclaimer here.