Bitcoin finally hit USD 20,000 yesterday, an event highly anticipated by all crypto enthusiasts. When this happened, all altcoins shot in prices and broke through their respective consolidation areas. A strange “Deja Vu” became visible on the sidelines for many traders though, who mainly speculate on price differences. Will the current bull run reminisce from events from the bad year of 2017?
Bitcoin Price poised to crash soon?
Back in 2017, the price of Bitcoin went up for several weeks, only to crash when buyers stopped stocking up on BTC. This extended price increase can be seen in figure 1, showing a weekly chart of BTC back from 2017.
Currently, the Bitcoin price chart is showing scary technicals: a whooping price shoot from USD 19,200 all the way to USD 23,400. This extended price increase comes after another extended uptrend starting after Q1 of 2020, with the recovery of the Covid-19 market crash.
Why is it a BAD IDEA to buy BTC right now?
The obvious answer is clear: after every rise, there is a fall. If not now, in the near future. Back in 2017, the price kept increasing, only to crash in the very beginning few days of 2018, where a lot of events usually happen in every market, namely 3 reasons to look out for:
- Christmas season calls for liquidating positions and buying gifts
- No one works during holidays, hence buying momentum decreases
- Chinese New Year is right around the corner
That’s why it is advisable to wait for a strong adjustment, potentially that breaks the 20k area all the way to the USD 19,000 area. If the adjustment didn’t happen now, it MUST happen at a later stage, bringing the price back down.
This advice is for short/medium term traders and investors. It does not affect long term traders who are eyeing 50k and 100k Bitcoin price.
Will you Miss out much if you wait?
In short, not really, only a couple of hundred bucks, unless you are an institutional investor. But in all other cases, it doesn’t hurt much waiting for a price correction, before getting a better price.
In figure 2, using the Fibonacci retracement, we can potentially expect a retracement back the to USD 19,000 price area, which is a good entry point to align with the coming phase 2.0 of Bitcoin prices, an era above 20k eying 50k.
Stay Ahead, Stay Updated
Rudy Fares
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