Bearish trend for Bitcoin. Analysis and forecast of the reversal level

Let's understand causes and consequences. Determining the reversal level

A little less than two months have passed since Bitcoin reached its all-time high at $20,000.00 on December 17, 2017. During this time, we already managed to look at the cue ball from above when it plopped down to a minimum of 5,920.72 USD. The euphoria from the crazy profitability of crypto investments passed first among those who entered into futures to buy a cue ball at 18 thousand, and then those who got it at ten thousand became “upset.” And only real hodlers silently watch the downtrend, waiting for the bottom. 

Many analysts are trying to explain the fall of Bitcoin, citing as arguments negative fundamental events that flash one after another in the news feeds: problems with the liquidity of one or another stock brokers, hacker attacks, viruses, attempts by government regulation of cryptocurrency exchanges and mining in one country or another. When news about government regulation became boring, they launched a new bearish round of sentiment: social networks banned advertising of cryptocurrency and ICOs, their search engines supported. 

Only in all these explanations effects are called causes. In our regular reviews on TradingView, we often pay attention to the colossal volumes of cryptocurrency that someone is buying at the very bottom. This is a proven tactic of the big Whales - hedge fund managers and market makers. Those who did not manage to jump on the departing train in time decided not to bother themselves with the price of 20 thousand, but to present a discount of 80 percent. As is now commonly said, “buy at cost.” And so, in order to shake up the price and push it to the ground, the entire arsenal of techniques available to the media is put into action, which, in fact, are the result of one irrepressible desire of the Whales - “buy cheaper.”

It is very interesting how “timely” the “crisis” began in the stock markets. When, after almost eight years of a cloudless bullish trend in stock indices, the market “suddenly” demonstrates the largest correction in the last decade.. It’s funny that they are trying to explain the fall in stock market indices by positive news about increasing employment in the United States and rising incomes. A chain of conclusions is given that substantiate that this indicator, which has always led to the strengthening of the American currency, entailed a fall in the S&P, Dow Jones and Nasdaq indices. And not a single mention of the fact that it was large sales of securities at the maximum of the uptrend that caused a decrease in their value and, accordingly, caused a drop in indices. Let's see which companies "lost" the most from the fall in their stock prices? This list includes:

- Alphabet (parent company of Google) - 40 billion US dollars;

- Amazone - lost 4% of the total capitalization (If we take into account that the capitalization of Amazone was 500 billion, therefore the total volume received from the sale of shares is approximately 20 billion US dollars)

- Facebook and Twitter for 3.7 billion US dollars

- and another 500 unnamed richest people in the world “lost” 114 billion US dollars.

In connection with the above, I have two rhetorical questions:

1. Where are the funds received from the sale of securities poured?  

2. Where does the money come from to buy crypto at minimums?

You don’t have to answer. And yes! I am exactly one of those “crypto enthusiasts” who directly connect “sales” of securities of high-tech companies with purchases of cryptocurrency in comparable volumes.

But, really, what I would like to know:

1. What level did the whales choose as the “cost price” of the cryptocurrency?

2. When will the price of the cryptocurrency reach the bottom? 

The simplest answer: “When the hodlers no longer sell a single satoshi.” But seriously, let's try to roughly estimate the bottom level.

The global weighted average cost of Bitcoin is estimated at five and a half thousand dollars. But as the classic said to those who want to lose weight: “Zero is not the limit! There are also negative numbers!” Likewise, the Whales may not stop at the cost threshold, and perhaps if they manage to push the price of Bitcoin below five thousand, then they will not hesitate to get into the miners’ pockets..

We will find out whether this will happen or not in the near future. Technical analysis indicates an upcoming reversal from the level of 5,000.00 USD. By the way, is it necessary to once again pay attention to the fact that a reversal in almost all cryptocurrencies will occur simultaneously with a reversal in Bitcoin.

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