If you caught the film/book reference in the title then I have bad news for you: you’re old. Like me.
It has recently come to my attention that BTC looks poised to fall in price.
Nothing Earth shattering, just a regular, healthy price retracement.
If you follow me on Twitter then you should have seen this over the weekend:
Like I said in that Tweet, I’m expecting a drop in the region of $1.5k – $2k. I base this on a variety of factors: reigning market sentiment, support levels, volume and historical retracement behaviour. Also as I said in the Tweet, this is more about gut feel than TA.
The main thing that is causing me to expect such a drop is a steady decline in volume over the last few weeks.
While volume is theoretically still high enough to surpass the previous Bitcoin All Time High of $20k, as crypto investors you need to realise that high volume alone does not cause price increases. Volume is an indicator of how much interest there is in the market. It also determines how high the market may climb when it is bullish and it acts to smooth out short-term volatility. Market sentiment is the major determining factor of price. Market sentiment and volume work hand in hand to form the lines we see on our charts.
I believe that market sentiment carried on increasing the price of BTC based on its previous momentum. This happened from mid-May to early-June. I also believe that once the market realises that volume did not follow, then price will drop. That retracement should be coming soon.
Am I right?
Maybe not, I’m not certain. Two major factors are causing me to doubt this prediction:
If prices were to drop now, it would go against the double bottom indication which I tweeted about last Thursday:
Volume is increasing today and price has increased by a meaningful amount (4.5% within the last 24 hours at time of writing).
As usual I expect you to decide for yourself. I have shown you what I think and why I think that.
To help you a little further I will tell you this: as I said in the uppermost Tweet, I have cancelled my fiat-based BTC buy order to take advantage of a possible lower price.
I place a 60% chance on the price drop prediction being correct.
Yours in crypto
“The secret to success: find out where people are going and get there first”
~ Mark Twain
“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful”
~ Bit Brain