Further Downside, Rally or Sideways?

Who Shot the Kneecaps?

Bitcoin has the power tp destroy all markets associated with it.  This we already know but it’s the Whales that are actually doing the damage.  No traditional retail trader in the world has a enough Bitcoin to actually move this market and by and large, Bitcoin Traders are Buy and Hold – Bullish Traders.  It truly only takes a few Whales with 10’s of thousands of Bitcoins to just crash a market.  

Be that as it may, we need to understand WHY they are dumping the market.  Has the cycle come to an end?  Are they withdrawing for taxes?  Do they just love screwing everyone over?  It could be a mixture of all three and another dozen reasons to boot.  

Here’s what we know:  Futures generally fill Gaps and a majority are filled within a day to a few days.  We also know that Bitcoin will generally put in a 618 retracement after a sharp downward move.  Using these two pieces of information, we can line out a somewhat Bullish scenario which can be nothing more than just a bounce after the 38% drop.

Price Action Potentials

From a High of $69,000 to a Low of $42,333, Bitcoin has dropped over 38% or $26,667.  That’s not even half of the standard 85% drop from ATH we would be looking for at some point in this game but it is a significant move nonetheless.  If we can consider the buyback/liquidation wick as support then we can start to measure out what a bounce may look like.  

If the CME Gap were to get filled, Bitcoin would need to push to $53,545.  CME and Crypto exchanges are not exactly the same minute by minute.  Things happen in the Futures that do not happen on Crypto exchanges and vice versa.

If Bitcoin was to make it to a 618 retrace from the low of $42,333 then we would be looking at a move to $58,800.  This would be about a 19% move from todays Open.

This is not to say that if we make it to $58,800 then we completely dies and it’s all over.  Breaking through that level and retesting the high is still in the cards just as breaking the ATH and putting in a third local leg is also in the cards as well.  

As of right now, we play the chart and the chart is certainly in an odd place.  

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