Bitcoin (BTC) Could Fall Below $2,000 During The Next Market Correction

Bitcoin (BTC) has been trading sideways the past few days in anticipation of a move to the upside before the next big correction to the downside. However, so far that does not seem to be progressing as planned. Apparently, a lot more people have become bearish the past few weeks and most of them expect a drop to at least $3,000 if not lower. The majority of Bitcoin (BTC) bears expect a drop below $2,000 in order for BTC/USD to find its true bottom. However, we believe that the chances of a close below the $2,000 mark are quite low at this point. That being said even if Bitcoin (BTC) bottoms around $2,500, we expect a wick to $1,800 at least but the buy orders might fill it up very quickly.

When the price of Bitcoin (BTC) topped out, very few people expected it to drop this far. Even those were bearish short term became bullish when they some rallies followed by steep declines. As a result, most of those people were trapped in who expected Bitcoin (BTC) to break out after a particular decline. This time though both the bulls and the bears seem to be on the same page. There might be differences over price targets but the majority expects BTC/USD to fall from current levels. This means that most Bitcoin (BTC) traders are prepared for the next drop which means it is very likely to be a devastating one. Soon as we see the price show some weakness, most traders would dump their Bitcoin (BTC) and the price would tank hard.

The weekly chart for BTCUSDShorts shows that the number of margined short positions has seen a trend reversal since last week. The price of Bitcoin (BTC) might have some room to rise further but the long term trend is clear and that is an imminent decline in the days and weeks ahead. This decline is expected to be deadly because it will push the price of Bitcoin (BTC) down the 200 week moving average after which investor confidence will be completely shattered. News and discussions regarding how Bitcoin (BTC) is officially dead will become to surface again. During this time, most people who were in it for the quick buck would leave the market thinking they will never invest in Bitcoin (BTC) again. Lest we forget, it is these people that come back and start buying at higher prices.

Bitcoin (BTC) has left investors confused the past few months but all of a sudden they seem to be on the same page regarding the next big move. This is not a good sign. As we have seen in the past, both bull and bear markets influence investor sentiments in certain ways. During bullish times, even the bears develop some bullish tendencies, but during the bearish times, even the bulls develop some bearish tendencies. Now, if they give in to such short term emotional distractions, they risk losing at the big game. It is reasonable to expect BTC/USD to decline from current levels but let us not forget that the price is trading in $3,000s a level most people would not have expected the price to decline to when it was trading around $18,000. So, this is the time to buy for the long term and not sell because we are not near the top, we are near the bottom.