Bitcoin, the Market Leader of the now 9,000+ Cryptocurrencies, has suffered a 53.77% pull back over the course of just six weeks. For context, Bitcoin had a retrace of 45% in 2017, 84% 2018, 53% 2019 and 65% in 2020. So on the face of it, this can be seen as normal. Our indicators show that despite this retrace, we remain in an overall Bull Market, and most Bitcoin Blockchain analysts, as well as experienced chartists, feel we are half way through this current Bull Run.
The question is, where is the bottom? Currently we believe that this sits at $30,000. Could it still go lower? Yes, but patience is vital. When Bitcoin sneezes, the Alts catch a cold.
Bitcoin will bottom, then most likely consolidate for a period. During this period money will flow into the good and most professionally managed Alt coin projects. However, gains made by the best Alt coins will be wiped out should Bitcoin dip below 30k. So the message is clear, great gains will be possible, the moment Bitcoin bottom is in.
THE REASONS FOR THIS DUMP?
Analysing the Bitcoin Blockchain, analysts can see that a number of Whales or larger investors holding very large sums of Bitcoin began selling on May 12. These individuals were not “Old Hands” or institutions, but rather new Bitcoiners who seem to have been in the market since the beginning of this year. They had seen their investment increase by 3-7x, depending when they bought. Sold for profit, forcing the market down, and we believe that they will buy back in once they see the bottom is in.
There have been other factors at play. Firstly power outages in Northern China for a few days, followed by “noises” from within the Chinese Government about clamping down on Bitcoin Mining (probably in an attempt to see off competition in their own Digital Yuan). It is noted that the largest Chinese Bitcoin Miner is building the world’s largest Bitcoin Mining Farm in Texas, USA. In addition, the amount of Bitcoin Leveraged Longs that we were able to see on the top exchanges was staggering. Over one 24 hour period, we estimate that over $8 Billion Leveraged Long positions were liquidated.
In Conclusion, we believe that we are now approaching the 2021 bottom, and the timing for our opening position will be within the coming 2-3 weeks.