Bitcoin (BTC) is more likely to crash hard below $3,000 than to form a golden cross that many expect it to. Throughout the course of this bear trend, we have seen orchestrated attempts to misguide the masses so they are forced to walk into the trap. When BTC/USD started to decline from its all-time high, the masses were made to believe that this was just a normal pullback and that Bitcoin (BTC) is still going to $50,000 long term. Similarly, when the price started to rise in February, 2018, FOMO was injected back into the market which trapped a lot of other people who did not know they are going to be bled slowly to their own death in the months ahead. After that, the $6,000 support was sold to the masses as the ‘unbreakable’ level because it happened to be the average price to mine one Bitcoin (BTC).
Make no mistake, during this whole time, the financial gurus and the media outlets that sold you the idea that the price could not fall below $6,000 knew full well that markets are irrational more often than they are rational. This means that no matter how overbought the price is, it can always get more overbought and no matter how oversold the price is, it can always get more oversold. In other words, there is no such thing as believing that the price will stop around $6,000 because it is reasonable to do so. Certainly, the majority of people in this market who are new to investing and trading are not to be blamed for this. You can blame the media outlets or ‘financial gurus’ but they are not going to change. They have vested interests and they are going to keep playing this game.
Now that it has been a long time that the market has run out of FOMO, we are seeing debates around the upcoming golden cross that could form on the daily chart for BTC/USD when the 50 day moving average crosses above the 200 day moving average. Now, there is no reason to be greedy and say that you are only going to start buying once the price starts falling below $3,000 because if you are really interested in BTC/USD long term, you may miss a rally towards $6,000 while you wait for the bottom. The probability of such a move is extremely low but it is still a possibility.
The point is, while we do not believe Bitcoin (BTC) has bottomed, we should be mindful of the fact that the price has dropped more than 80% and is very close to a bottom even if it hasn’t bottomed. The daily chart for BTCUSDShorts shows that the number of margined shorts is expected to rise short term till it hits the trend lien resistance. After that, we may see a sharp decline to the downside which would coincide with a strong move to the upside in BTC/USD before the final corrective wave to the downside begins.