Bitcoin Bear Market Or $20k Retreat?
Unpopular opinions are also opinions. For those of us that have never experienced a brutal selloff, know that these trades make you grow as an experienced analyst as well. Even Pythagoras knew that what goes up must come down and it was therefore to be expected that Bitcoin would retreat towards the $30k point (or even lower) at some point in time.
Although Bitcoin is up 5% today, it is down 12% on the week. The selloff that some expected apparently started this week and thus the question lingers: is this the beginning of a bear market or a retreat to test the $20k support line?
A month ago, we were giddy with btc at 21,000 ATH. Today we are upset with btc at $30,000. pic.twitter.com/ktAMms5FMF— CZ 🔶 Binance (@cz_binance) January 22, 2021
Retrenchment to support line?
On 5 January already, this website asked where support would lie for any future retrenchment of Bitcoin. At the time, the most famous of all cryptos was trading near $34,000 and we estimated that since the parabolic line had started from $20k, that is where support could be found in future.
That idea has since been repeated by none other than Guggenheim Partners Chief Investment Officer Scott Minerd who told financial channel CNBC this week that he thought Bitcoin would retreat back to $20,000 (after it reached a record peak at $41,962.36 on January 7).
6) After the supposedly "bullish" news of BlackRock looking to Bitcoin, we saw a hefty market correction.— CryptoWhale (@CryptoWhale) January 22, 2021
Over $200 billon was wiped from the crypto markets as the news spread. For something apparently so bullish, that's an odd reaction, don't you think? pic.twitter.com/aHsuiFEXvK
For the time being, we have probably put in a top for bitcoin for the next year or so,
Minerd said three days ago. We wouldn’t be that bearish in the short term, but do admit that a healthy retraction is due.
In any case, it looks like a sharp retreat for Mr Minerd, who just a week before was still very bullish on Bitcoin when he was interviewed by Bloomberg.
On the other side of the analysis spectrum we then find our favorite contrarian analyst CryptoWhale who claims that based on technical analysis and candelsticks, this could very well be the beginning of a bear market.
Welcome to the Bear Market! 🥂 pic.twitter.com/BbefeqQtbX— CryptoWhale (@CryptoWhale) January 22, 2021
His followers were not totally convinced though, even if the man is convinced that what he calls the Tether injection will lead to a similar blow-off top as we’ve experienced back in 2017-2018.
Crypto Whale stated, on 7 January as the current Bitcoin top was set that:
The current expanding $BTC bubble shows many similarities to the last bubble from 2017. With daily Tether injections each day to sustain Bitcoin’s rise, and attract new victims, the risks are extremely high. The bubble will likely pop very soon!
As always we end with: time will tell.