The inevitable pullback has started and crypto markets are beating a retreat at the moment. Bitcoin is leading them down as it drops back below $5,000 dumping 6 percent on the day. The question now is how low will it go?
Minor Pullback or Major Correction?
A number of analysts had predicted a major capitulation before any real trend reversal begins and this could be the start of it. Looking at the charts last bear market cycle in 2015 they’re virtually identical to patterns emerging this time around.
If the same scenario plays out Bitcoin is about to dump back to around $4,000 or lower in what has been termed a final capitulation. This will be the trigger for an influx of buyers to drive prices back up and through current resistant levels at moving averages to mark a longer term trend reversal.
Crypto trader Josh Rager has anticipated more sideways trading until the CME futures expire later this month. A long drawn out accumulation period has also been predicted with some not expecting any real upwards momentum late this year.
$BTC could see some sideways action in the next couple weeks up until Bitcoin CME Futures expiration on 04/26
Not exactly expecting fireworks yet but it’s only one scenario and it is a volatile asset
This accumulation cycle can likely take a lot longer than most people think pic.twitter.com/nPYLOFV4IB
— Josh Rager (@Josh_Rager) April 11, 2019
Others are a little more confident that markets will not slide back to new lows. A couple of months ago several analysts were predicting a massive dump all the way down to $2,000 or lower but those notions appear to have dried up.
Technical analyst Alex Krüger does not expect Bitcoin to fall that far back as there is major support still at $4,600 where the 200 day moving average is.
Coinbase high was $5489. Don’t expect a pullback to $4000. Too deep.
– Support: 5000, 4780-4680, 4550 (200DMA), 4400, 4200
– Resistance: 5350, 5500, 5750 (weak), 6000, 6400 https://t.co/IbAe07wTEZ
— Alex Krüger (@krugermacro) April 11, 2019
Total Market Cap Bleeds $18 Billion
This sentiment has been echoed by other traders looking at the market cap as a whole;
— The Hodlonaut Dog (@TheCryptoDog) April 12, 2019
Crypto markets have dumped over $18 billion since their 2019 high of $185 billion on Monday. Altcoins are purging the most at the moment with several such as Litecoin, Bitcoin Cash, Bitcoin SV and Ethereum Classic dumping double digits on the day. Markets have hit their lowest levels for the week with total cap dropping to $168 billion today. One key take is that total volume is still at its highest levels since the 2017 bull run, currently almost $60 billion traded per day.
According to TradingView Bitcoin dropped to a weekly low of $4,940 a few hours ago before making a slight recovery back to just below $5,000. BTC RSI on the one day chart has now dropped below 70 so the selloff could decelerate a little. The next few hours will be crucial in determining whether this is just a minor pullback or a major correction which could be the catalyst for the final capitulation.
Image from Shutterstock
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