It was an exceptionally rough week for Bitcoin and more so for altcoins. The terrifying story of Luna stood out. We have been sending warning alerts to our premium members since mid-April, suggesting to accumulate cash and stay away from fresh new buying. Moreover, in the public space, we said Crypto Is Complicated, But Also Very Simple in which we indicated the make or break level.
This is what we wrote a few weeks ago:
The one and only thing that matters, currently, is the test of a rising trendline which is shown in green. This trendline marked the lows of the January and February sell-offs. Since then, BTC did not sell off significantly, it only had a steady decline since April 5th.
It happened, the green trendline was broken and BTC became very vulnerable.
This is what we said as well when BTC was trading around 40k:
We believe it is wise to be cautious here. No aggressive trades nor positions should be opened because if BTC violates the current level we see it re-testing 33.3k (eventually, potentially, 29.1k).
Could we imagine how much damage would be created in a coin like LUNA? No, it was a once in a generation type of event. Still, caution and warning signals should be taken seriously, in any market.
Where do we go from here? Very simple, the weekly chart has the answer. Always zoom out when it gets cluttered in your head.
The weekly has this giant rising trend channel. It also has a really large wick with the price drop ending around the one but last median line. Ultimately, BTC could potentially go to 19.6k although we don’t think it will fall below 22k. Not saying it will, saying it could.
On the flipside, whenever BTC rises above the red falling trendline that connects the highs of May of 2021 we will probably see a very bullish setup with last week’s candle which will be a bear trap type structure, somehow similar to the Corona crash low. Not there yet, but it might happen.
Always stay focused on the big picture and create this mental picture of the 2 sides (bullish and bearish), track the market and try to relax. Emotions create clutter, it doesn’t help. That’s how we try to help, as much as we can, crypto investors in our premium service.