Bitcoin is going through what we believe is the most extreme consolidation pattern in its history. It is now ‘breaking up’ for the 5th time in more than 3 months. It is fooling bulls, it is fooling bears, it is fooling us as well. Since today the bulls may have the benefit of the doubt… again! And our crypto predictions for 2021 might be crushed even more this year, who knows. The one last crypto prediction that didn’t come true in 2021 is our XRP forecast, presumably it is a matter of time until the market hits our bullish target(s) as well.
Didn’t we say last week that Bitcoin Rejects $55.5k, Not Good
We did, and the rejection was short lived. The next few charts make the point. As always we are very transparent in also reviewing our previous points. We are also very fast in adjusting whenever required. It’s pointless to think in terms of ‘right or wrong’, it’s about how much profit you realize in markets (and how many losses you can avoid). That’s the only thing that matters!
Let’s focus first on BTC: the consolidation shows now one seemingly orderly rounded pattern, and since yesterday BTC confirmed it wants to move higher. However, this exact same process is now ongoing for several months, and it’s the 5th ‘break up’.
One might argue: why worry, these crypto markets continue to go up, just buy the f*****g dip and calm down. That’s true until it isn’t. Without some form of protection you will find yourself exposed to reckless behavior. And it works until it doesn’t. Don’t be reckless, it’s ok to be cautious while ambitious!
We went back, many years in time, and could not find any other more misleading consolidation on the BTC chart!
There are 2 ways to think of this (a) the nature of the BTC market has changed drastically so no reason to bother with a ‘violent’ consolidation (b) there has to be a first unusual consolidation, and what’s unusual now may turn unusual in the future.
We will know over time whether it will be (a) or (b) that is playing out now. For now, all we are interested in is to know if and which positions will give us a great risk/reward setup. And we have 4 of them, published in our latest crypto alert in our premium crypto research service.
The rising trend channel on BTC’s chart makes the point even clearer: since a few weeks the trend channel is broken to the downside. However, BTC continues to move higher after breaking down. It is now again near its trend channel.
Same remark here: why bother about this channel, some altcoins are moving higher (think ETH and LTC) and in the end the market is buying any dip in BTC.
Same answer: it works until the music stops playing. And it may not be now, but if you lose yourself in reckless behavior you will miss that exit (or partial exits along the way) and you might be caught up in a major top. That major top might not be here now, is what the first chart above may be telling us.
In our crypto investing research service we featured 4 altcoins that may go next, in an update published 2 days ago. Those 4 coins have explosive setups. All they need is a supportive crypto environment, and a flat BTC chart is sufficient.