Bitcoin ultimately hit USD 20,000 last week and breached the $24,000 just recently. An event that was highly anticipated by all crypto enthusiasts. When this occurred, all altcoins shot at prices and broke through their particular consolidation areas.
A strange “Deja Vu” became apparent on the sidelines for many traders though, who essentially contemplate price differences. Will the prevailing bull run recollect events from its bad experienced way back in 2017?
Bitcoin Price poised to crash soon?
Three years ago, the price of Bitcoin went up for several weeks, only to crash when buyers ceased stocking up on BTC. This extensive price hike can be seen in figure 1, showing a weekly chart of BTC back from 2017.
Just recently, Bitcoin’s chart is showing scary technical: a whooping price shoot from USD 19,200 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 definite answer is clear: after every rise, there is a fall. If not now, soon.
Back in 2017, the price kept building, only to crash in the very beginning few days of 2018, where a lot of actions 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, therefore, buying momentum decreases
- Chinese New Year is right around the corner
That’s why it is prudent to wait for a strong adjustment, conceivably that breaks the 23k area to the USD 19,000 range. 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 longer?
In short, not, 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.