Last week when Bitcoin briefly eclipsed $9,000, I put out a note saying it would quickly fall below$7000, which it promptly did (going as low as $5900). Bitcoin to$50,000 this year?
Unlikely. $10,000 again would be a surprise. Bitcoin will likely retest$6,000 again.
The momentum is still strongly negative, and Bitcoin failed to reclaim $9,000. If you look at the price for the past 2 weeks there is a very strong undercurrent of selling. These temporary bounces are like trying to stop the path of steamroller with a mattress in terms of effectiveness. I’m not sure who is responsible for this undercurrent. A very large position or (positions) is being unwound right now. It could be funds selling or a group of whales…who knows. The weird thing about markets is, you only need a tiny imbalance in favor of buy/sells to make the market go significantly up/down. What I mean is, most people think when there is a major decline that the sells completely overwhelm the buys, but the ratio is more like 55% sells and 45% buys, so it’s very close to 50-50 yet that 10% difference is what causes the price to fall so much, especially when it’s sustained by for many days and weeks. Second, you need very large buy orders (what I call ‘big block buyers’) to overcome the steady selling. Between early 2017 to December, there was a steady stream of large 100+ coin buys at regular and consistent intervals that kept the price rising and were big enough to clear out a good chunk of the ‘ask’ side of the order book (I remember a few times 700+ coin walls being instantly cleared at$17,000). Those type of orders, however, are mostly gone and now it’s mostly 5-10 coin buys, but without the big buys at regular intervals, the smaller 5-10 coin sells and the occasional 50+ coin sells will win the the price will go lower until the the ‘big block buyers’ reenter the market.