Bitcoin Price Setting Up to Disappoint the Bulls
Bitcoin was the hot topic a few months ago. No matter where you looked or who you talked to, the cryptocurrency was getting a lot of attention. In the midst of this, there were a lot of calls for the Bitcoin price to go much higher.
We were even told that Bitcoin would hit $1.0 million!
Well, those predictions were very wrong; the cryptocurrency now trades at $6,734, which is 64% below its highs of around $19,000.
Here’s the thing: those who were predicting that the Bitcoin price would soar were forgetting that the cryptocurrency was getting into bubble territory. They forgot that a bubble could go on for a while, but when it ends, it’s never good.
With this said, please look at the Bitcoin chart below. It shows exactly what has happened with the cryptocurrency, and where its price could be headed next.
Chart courtesy of StockCharts.com
Between June and October 2017, we had the so-called smart money coming in. The Bitcoin price was relatively stable. There wasn’t panic buying or panic selling.
Then, at the end of October, we got into the greed-and-delusion phase, which continued until mid-December. This is when Bitcoin started to skyrocket and there were outright unhealthy moves. The cryptocurrency’s price went from $4,000 in October to $19,000 in December.
That was way too rapid an increase, given that the fundamentals weren’t strong. We had a lot of regulation talks, and countries were discussing how Bitcoin will be taxed, and whether it should even be allowed to trade.
In late December, there was a sell-off.
Instantly, after the Bitcoin sell-off, we had buyers come in. They bought thinking that the cryptocurrency’s price would bounce back. This is what you call a bull trap; it’s when price action lures investors in. They start to think it’s stable and that it’s time to buy.
Now, we are seeing sellers’ capitulation.