Bitcoin (BTC) has closed the week above $8,000 but has now retraced well below that mark as it has started the first day of the week in red. We have mentioned in our previous analyses how this rally was nothing more than a few big players propping up the price so they could achieve their objectives. Initially it seemed to be about liquidating short sellers but soon afterwards it became clear that the whales were not clear of a little naked manipulation. In fact, it was a little too naked this time but quite surprisingly the whales did not care even as the SEC is about to rule on an important Bitcoin (BTC) ETF tomorrow. Before that we have had the Tether controversy and now it has become clear that the price is short one catalyst to begin its next downtrend.
The SEC is expected to rule on the VanEck Bitcoin ETF tomorrow but in light of recent developments, it appears that there might be a risk of rejection this time unlike the delays we have previously seen. Even if the ETF is delayed, the bullish euphoria might soon fizzle out and BTC/USD would nosedive towards $5,000. The thing about pumps and dumps is that the price can go down the same way it rallies. At this point both the bulls and the bears expect some sort of a retracement. If we look at the monthly chart, there are two scenarios BTC/USD could be following. Either it is repeating the 2014 part of the last cycle or the 2015 part. If the price is repeating the 2014 part of the cycle, it means that investors have less than a month to get out of Bitcoin (BTC) before the next crash. On the other hand, if the price is following the 2015 part of the last cycle, it means that investors still have five more months to buy at current prices. This is why it is best to sell now and wait it out.
Bitcoin (BTC) has just formed a double top on the 4H time frame and is expected to begin its downtrend as early as this week. The RSI and NVT indicators point to the risk of further downside in the days ahead. The price is currently eyeing a retest of the 1.272 Fib retracement level. However, we expect it to fall further and decline all the way to the 61.8% Fib retracement level. If it fails to find support at that level, we will have confirmation that the market is headed towards another downtrend which is why it would be prudent to refrain from buying the dip.
Expecting the price of Bitcoin (BTC) to shoot up towards $20,000 in a year or two is nothing short of wishful thinking. There is a lot that has happened and a lot that will happen in the next few months that is going to make a retest of $20,000 very difficult. The market has yet to see maximum pain and towards the end of the year we might see BTC/USD trading at significantly lower prices. Once Bitcoin (BTC) falls below certain key support levels, those levels will take months and years to be breached. The monthly chart shows that BTC/USD has yet to break below its trend line support. There is no maximum pain until that happens. The price has to fall below this trend line support which will then turn into trend line resistance for the next cycle.