With the psychological storm brewing, it looks like the bitcoin price will break down to $5,000 before a reversal pattern emerges. While this seems bleak, keep in mind: just a few weeks ago we thought the price would drop all the way to $3,500.
Bitcoin could anticipate a strong reaction at any price below $5,000 and break the descending resistance, crossing to the upside at a lower level like $6,000.
Theoretical Mass Psychology Analysis reflects an ongoing panic phase, and anticipates the next two stages:
Capitulation, when the majority break and give up, trying to get out from their positions;
Anger, when people try to find a consensus response for general consolation.
The increasing volatility could exit the values from this psychological crisis and start a huge reversal from any price below $5,000.
A bearish channel continues dominating the ongoing trend, the objective of which bottoms out around $3,500.
However, this situation is subject to change, and according to Elliot Wave Theory prices seem able to bounce up and down in an ABC zig-zag pattern between $5,000 and $3,500. From there, a brief lateral market would emerge, helping kickstart a reversal rally to $14,000.
If this scenario confirms, Mass Psychology´s next phases would active and support a huge upward movement far beyond historical highs.
Mathematical indicators reflect a downward movement in process, without reversal signals at sight.
News, opinions, rumors and political data are confused, and bullish consensus remains low. All prices below the 3rd wave low at $5,700 are good enough to anchor the 5th wave from Elliott´s theory and to end the bearish cycle.
What do you think will happen to the bitcoin price? Share your predictions in the comments section.
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This technical analysis is meant for informational purposes only. Bitsonline is not responsible for any gains or losses incurred while trading bitcoin.
If you find Ramiro’s analyses interersting or helpful, you can find out more about how he comes to his conclusions in checking out his primer book, the Manual de Análisis Técnico Aplicado a los Mercados Bursátiles. The text covers the whole range of technical analysis, from introductory to advanced concepts and everything in between.