Bitcoin sold off on Monday to kick off the week, dropping nearly $10,000 or ~25% in a matter of hours before finding support around the $30K level, recovering nearly half of the loss to end the day around $34K. This is a bearish candle and a bloody start to the week as Bitcoin gave back most of last week's gains and the candle doesn't necessarily suggest Bitcoin's found a short-term bottom just yet.
(January 11, 2020 7:30PM EST)
Bitcoin sold off on Monday (technically the price action started on Sunday) as Bitcoin net lost about $6,000 on the day, initiating an inevitable correction we forecasted we were bound to see sooner rather than later. Bitcoin went parabolic; this is no surprise as even the mega-cap crypto experiences significantly higher volatility and exponential rallies than traditional assets. However, what goes up must come down (eventually) as Bitcoin has been known to defy gravity longer than most anticipate before eventually falling back to orbit.
For now, I think Bitcoin will continue to drift lower as the miners and short-term profit-takers conclude their selling by converting paper profits to realized profits and weak hands are shaken out. However, don't be mistaken; this is a short term correction and a necessary one at that. Frankly, it's healthy to see a decently-sized correction occur as bull markets start and progress, as this marks a relatively sustainable bull market.
Fundamentally, nothing has changed: supply is lower and getting lower, demand is increasing (and already overconsuming current daily supply), Quantitative Easing of fiat remains high and will only ramp up higher with a blue wave sweeping US presidential office and Senate, and investors continue to flock like dominoes to Bitcoin as an inflation hedge and store of value.
My point is simply to buy on dips, dollar-cost average on a regular basis, and even earn Bitcoin if you can. The path of least resistance is up; don't try to fight it unless you're a degenerate gambler willing to get burned.
You simply can't short or even sell this market when all it does is go up over time. Sure, there are short-term fluctuations, but long-term there's no sense in missing out on this ride. This is truly the trade of the decade: if you're not in Bitcoin, chances are you'll be getting much worse returns elsewhere.
Support: Look for support around $30K (38.2% fib) and then $25K (50% fib). Anything lower than that is a screaming buy, though I'm not even sure we'll see $25K again. For more precise price targets, set staggered buy orders at Fibonacci retracements levels and monitor price action to see what gets filled, and if Bitcoin starts to form a convincing-looking reversal, adjust accordingly (up or down).
Resistance: Look for resistance at $40K. If Bitcoin breaks above $40K, look for $45K, and then $50K. After that, we'll probably move in $10K increments.
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