Bitcoin (BTC) has started the new week trading above its 50 week EMA. The weekly chart for BTC/USD shows that the price is now also at the top of the ascending channel it has been trading in since December, 2018. Normally, we would expect the price to retrace anyway when it tests the top of the ascending channel being this overbought. The weekly RSI as well as the Stochastic RSI both signal a major pullback to come in the near future. The NVT indicator is also signaling a major sell-off that could at least pull the price back to the bottom of this channel if not lower. Considering that the given cycle has to be longer than the previous one, we expect the price to take a lot longer than before to complete each fractal.
Expecting the price to fall straight to $1,800 from current levels would be nothing short of unreasonable. If the current cycle is going to be longer than the previous just like all other succeeding cycles have been longer than the preceding ones in the history of Bitcoin (BTC), we would expect indecisive price action to continue for a lot longer than most anticipate. In fact, it would not be surprising if BTC/USD ends up reaching the $1,800 mark around late August or September this year. That being said, the price is likely to start declining towards the bottom of the ascending channel towards the end of May. Before that happens, we could see the price attempt to test the $5,800-$6,000 resistance zone. A rejection at that zone will be a strong catalyst in sending the price down towards $1,800 in the months that follow.
According to the current results of a poll conducted by Crypto Daily, more than 70% of the participants think that the bear market is over. This means that the majority still believes the bear market is over when Bitcoin (BTC) has not even inflicted maximum pain just yet. As mentioned in some of our previous analyses, when the Mt. Gox hack happened, the majority of investors were not sure if Bitcoin (BTC) was going to make it. When BTC/USD bottomed, there were not many people who wanted to pick it up thinking it was going to the moon. This is not just about Bitcoin (BTC), every time an asset sees a bullish trend reversal; the market has to inflict maximum pain prior to that.
So far, the majority of investors are very confident that Bitcoin (BTC) is going to the moon. The prevailing bullish sentiment could lead to BTCUSDShorts falling in the weeks ahead. People are eyeing price targets of $100,000+ during the next cycle. This alone is sufficient to establish that the market is way too far from inflicting maximum pain just yet. Our target of $1,800 is a conservative target. The current outlook of major financial markets across the globe indicates that things could get a lot worse than that and Bitcoin (BTC) may end up seeing a triple digit price especially if we see the S&P 500 crash in the months ahead.