(BTC) is currently in a tough spot. The next few days have the potential to decide the fate of Bitcoin (BTC) for the months ahead. So far, the cryptocurrency
has done well to stay above $6,000 but having breached that level once, it would not be a surprise if it did that again. However, this time around the consequences will be grave if something like that happened. If Bitcoin (BTC) falls below $6,000 and continues to stay down till the end of the month, it will mark a fall and close below $6,000.
The long term trend on the monthly chart above shows that for a long term bullish scenario to hold, Bitcoin (BTC) has to remain above $6,000 on the monthly chart. If a candle falls and closes below $6,000 on the monthly chart, it will break market structure and as a consequence, Bitcoin (BTC)
can be expected to test $3,000 or lower levels in the months ahead. On the other hand, if this month of June ends without any breaking of market structure as Bitcoin (BTC) stays above $6,000, that would mark this correction as over and a new bullish phase will begin, likely to push the price above $50,000 till the upper portion of the bullish channel is reached.
With all that is going on in the cryptocurrenc y and blockchain space, it does not make much sense to think Bitcoin (BTC) could enter a long term bear market. However, in the case of any financial asset, a good indicator of the point of reversal is the true value of that particular asset. It is true of any market, be that real estate, stock market or commodities like Oil and Gold. In the case of Bitcoin (BTC), inherent value comes from mining costs. To determine when a reversal can be expected, we need to consider what the average cost of mining per Bitcoin (BTC) is. While the cost of mining differs from one country to another, the average comes down to $6,000 per Bitcoin (BTC). This is where we are right now.
However, it is pertinent to note that Bitcoin (BTC) is largely influenced by miners at this stage. The volume is low as trading is negligible. This means that the miners can pump up the price of Bitcoin (BTC) soon as it falls close to or below $6,000 so that their long term mining operations can remain profitable. The same is true of some big exchanges that have in the past used fake buy orders to prop up prices. All things considered, it is not in the interest of the people who currently control and manipulate Bitcoin (BTC) to let prices slide below $6,000 for long. However, with the introduction of Bitcoin (BTC) Futures, other games could come into play. For instance, these market makers can let the price slide below $6,000 for some time to give a false sense that market structure is broken. As soon as bears are trapped in with their short positions, they will pump the prices back up to liquidate their positions. We have seen this happen many times in the past. It is true that market makers can let the prices fall for quite some time until their hidden agendas are fulfilled, but for long term investors who believe in the future prospects of the market, 5 or 10 years from now, this should not make any difference.