So, with the recent decline in Bitcoin (BTC) and crypto yesterday, it seems people have turned bearish.
Perhaps it’s metaphorically after midnight, and maybe we are wearing beer goggles, but we think crypto charts look way better than they might to others.
Looking first at Bitcoin (BTC) on BitMEX, XBTUSD seems to be holding at the 38% retracement of its recent up move near $4,929. So, the recent decline seems like normal corrective activity. A 38% retracement is both common and healthy after a really big up move (Figure 1).
Ethereum (ETH) and Litecoin (LTC) are also holding near key Fib retracement levels.
Ethereum is bouncing back and forth between the 50% retracement at $162 and the 62% retracement at $157 (Figure 2). As long as $157 acts as support in Ethereum (ETH), a bullish chart structure is still intact.
In Litecoin (LTC), the 62% retracement of the last leg up seems to be an important level (Figure 3). If $75 holds as support, you might say Litecoin (LTC) has done enough consolidating.
Bottom Line: Our assumption is that Bitcoin (BTC) and crypto has started a bull market that will last all year. In the initial phases of a bull market, corrective dips end faster than people think. The pain trade comes from shorts pressing after an initial drop, which can spook bulls.
We believe this is what is currently transpiring. This could mean the recent dip is a buying opportunity because $5,000 is stronger support than people think.
The Crypto.IQ Trading Desk has its own unique view of the recent correction.
Join me there to follow their guidance.