Bitcoin has been in a downtrend for the last week, there’s a lot of fear in the market but is the bottom close?
At the time of writing Bitcoin recorded a new low of $43,000 dollars which equates to a 27% correction from the previous all time high of $58,000. There’s a lot of fear in the market along the current dip of the traditional markets which can be a cause of Bitcoin’s correction. A key point of the current pricing is to #BuyTheDip, remember it’s always important to buy into fear and sell into euphoria.
I have analyzed the correction of January that Bitcoin went under and came to the conclusion that we are close to bottoming out of this correction.
Looking at the image of the first correction on the daily candles we can see the pattern that Bitcoin created, during this time Bitcoin corrected 31% recording a lowest point of $28,000 a couple weeks after recording an all time high of $42,000 dollars. Analyzing the EMA ribboin we can see that the correction ended at the 200 Dailiy EMA which is the lowest line of the ribbon.
These Exponential Moving Averages (EMA’s) are equations of averaging the price of the asset for a certain amount of time.
Going into the current correction we can fin Bitcoin creating a triangle very similar to the one in the first correction. Bitcoin can either continue to trade within that pattern which would extend the correction for a couple days or there is a chance that Bitcoin has touched bottom at $43,000. The latter is confirmed if Bitcoin is able to break out of the pattern at an estimated price of $46,000. The correction has been very aggressive in such a short amount of time.
By plotting the EMA ribbon in the current correction we can find that the 200 EMA currently sits at $41,000 which is confluent with the lower trend line of the pattern.
Either way I think the end is close and Bitcoin will continue it’s parabolic move towards the upside.