Bitcoin (BTC)’s Worst Days Behind It As The Bear Market Nears Its End

Bitcoin (BTC) is about to find some relief as the yearlong bear market comes to an end. Make no mistake, Bitcoin (BTC) is not likely to shoot straight towards its previous all-time high in the next few months and then reach a new high in 2019. It will be a long time before we see that happen. Investor confidence is hurt badly at the moment. One might think that there are a lot of smart people who would not care about emotions and would be happy to recognize this opportunity and accumulate at current levels. However, the reality is that there are a lot of avenues available now to people who want to avoid trading on exchanges.
Unlike the bear market of 2014-15 when investors who wanted to get back in the game had to buy directly on exchanges, this time investors have options to buy without affecting the price of Bitcoin (BTC). The best way to do that for the big money wanting to get into the game is OTC (over the counter) Markets. This process avoids exchanges and thus no matter how large a transaction is, it never ends up reflecting in the actual price of Bitcoin (BTC). Thing kind of thing works both ways. If this happens at the bottom, it does irk a lot of Bitcoin (BTC) bulls who would want the transaction to reflect in the price of Bitcoin (BTC). However, what they do not realize is that the same thing could happen at the top of the market.

Imagine the price of Bitcoin (BTC) trading at $18,000 and a few large hedge funds decide to pull out at once. If they were to do this on exchanges, it would tank the price of Bitcoin (BTC) in a matter of minutes and it might be too late for a lot of people to get out. Even the people looking to dump their Bitcoin (BTC) would not be able to get out at good prices. In the end, this kind of arrangement does not work to anyone’s benefit. This is why we have so many financial tools and products in the market that we can take advantage of. We can criticize options, futures or derivatives but we can use them to our benefit to hedge against complex outcomes as well as to better manage risk.

The 4H chart for BTC/USD shows that Bitcoin (BTC) is trading in an Inverse Head and Shoulders pattern. The head seems to be fully formed now and it is now time for the right shoulder to be completed. It is thus likely that Bitcoin (BTC) will retrace short term to $3,500 or lower levels in the next few days towards the end of the month. However, the beginning of 2019 is expected to be the beginning of a new cycle for Bitcoin (BTC) where we will see the correction come to an end and retail investors gradually beginning to flock towards the market in large numbers.