Cryptos have been hit hard in the past 15 months or so. Most of them fell in price by 90% or more. This was needed, there was just too much junk, too much shitty projects and scams. The main question is, are we cleared of this now or not yet? And can the developments and improvements, that kept a strong pace, turn the trend around?
Last summer I was warning my readers that if Bitcoin falls below $6,000 you should get out as the space could shrink yet again. I know that some people like picking bottoms, there are strategies that make people buy down trends because they think they’ll miss a rally otherwise. I greet that, not because it would be a great strategy, but because we can find buyers when we need to get out.
If you follow me regularly you know by know that bottoms and tops are always a process, never an event. Don’t believe anyone who’s trying to convince you otherwise. They’ll most likely gain something off of you.
Anyway, cryptos are in the middle of a process that could end up being the bottoming process.
Here’s a daily chart of BTCUSD.
The price has been stuck in a range below $4,200 since November last year. This range could only be a consolidation within the downtrend and we must respect that – if the price is below $4,200 or even worse, below $3,300, we don’t want to own it! However if the price breaks out above $4,200 there could be a pretty good chance the bottom is in.
A break out higher would most likely coincide with a break above through the falling trend line too.
Even though ether looks worse than bitcoin, price action in the past couple of months looks quite similar.
Only if the price breaks above $165 we can start thinking a significant bottom is in.
The best looking chart is the litecoin’s chart.
If the price can hold above $50 we could have a very constructive stance towards it. Should it fail to do so, I’d be very cautious!
The line in the sand for me is $4,200 level in bitcoin. If the price can break above, it would be a major signal to me. However I can’t say with certainty it will. Neither I can say when will it happen if it decides to do so. Remember, bottoms are a process and it takes time for them to form. Sometimes they can take more time than most will anticipate. Remain patient, but decisive if it happens!