Surely this must be it, right?
Well, first of all: don't call me Shirley. Secondly... I don't know. This is the a perfect storm after all. All financial markets are collapsing at the same time and the one thing we can almost (but not quite) say for sure is that crypto is not immune. It is not a 'risk off' asset. But we discussed that already in an earlier post. We did not get the relief bounce above 9200 but got stuck there as I feared we would. BTC not showing any resilience and being unable to (relief) bounce to 9500 is a bad sign in my book.
Despite everything, still the same chart. My hope is now on the weekly 100 EMA to hold BTC up. If that fails to work, we will be seeing a different pattern, but we will cross that bridge if and when we come to it. Well, maybe not cross it, but fall straight through it. So low 7s is what I am looking at for this move down to end. That being said, there is some logic to it ending right here, right now. However, taking the overall markets into account, I am inclined to reason against that, even though that was my original estimate for this low. A sliver of hope can perhaps be gained from the 12hr.
A new hip and trendy fib is the 707 (I believe I mentioned it before) and we are right at that level right now. And as you can see from a look-left exercise, it is a logical level of support. However, I doubt it will be a reversal point. We might see a somewhat decent bounce here but I would not be surprised if we end up at the 786/886 zone as indicated on the chart.
How? Well the chart below might give an idea....
I have to admit, that a lot is based on the 12 hr Stochastic. In a normal climate, this is what I would expect. Now, if the markets capitulate even further, we are in for a long term and hefty consolidation. This will after all be the first time that crypto will be confronted with a market downturn, a global pandemic scare etc. Nobody knows how it will react because - as I said - it is the first time it will see this. Personally, I am not terribly optimistic, as money generally doesn't flow towards speculative assets in a crisis. We will definitely know more by the end of the week. Meanwhile: trade safe!
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