Bitcoin has been all over in the headlines, following last week’s nosedive and ensuing volatility. Last weekend, I shared my concerns about bitcoin over the near-term.
Bitcoin cycles look are pointing to a potential trading bottom mid-June and/or early July. However, given the bearish slope of most “weekly” cycles, it’s possible to see weakness into late 2021 / into 2022).
With this in mind, it’s tough taking a long-term buy and hold even on further weakness into June. Mindset should probably be opportunistic for a trade.
Bounces likely will prove temporary, and would recommend holding off on buying too aggressively until Demark weekly TD Buy Setup counts have been completed (we are currently on a 6 count). Near-term, one needs to see a rally back OVER 47,000 to have any real confidence of a larger bitcoin rally.
Structurally, Bitcoin broke down badly following a deterioration in momentum at a time when investor sentiment was very high. This coincided with overbought conditions and led to a rapid pullback over the last 2 weeks. It’s noteworthy that much of this happened ahead of any “Call for Regulation” and/or push for greater transparency – Both of these concerns should limit upside for 2021.
That said, there should be opportunity to buy dips in about a month. (The Pink Amplitude line shown in the chart above from Foundation for the Study of Cycles doesn’t necessarily indicate that prices need to get back to highs in the same extreme as our decline, only that a bounce is likely into July.
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Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
