Bitcoin: 25K Test? 22K Possible.

12 Jun 2022

Bitcoin has broken the 28K minor support, but do NOT over react. If you have been following my reports, this move should not come as any surprise. The question is, how meaningful is it in terms of the bigger picture? And how does this shape expectations for the coming week? In this report I will offer some potential scenarios to prepare for.

Before I get into that, here is something to keep in mind: If you are anxious or confused or worse, stuck in a position and not sure what to do, it is most likely because you lack the perspective and confidence to make OBJECTIVE decisions. It is human nature to react to information, and fake gurus are incentivized to attract your attention with over dramatic titles, over exaggerated opinions, etc. Stop consuming the financial pizza. All markets are highly RANDOM which means conventional logic or hope will NOT help you, especially during times of elevated uncertainty. My goal is to offer an objective perspective based on technical facts that can help to further measure RISK. If you don't respect the risk, your results will be random at best.

Let's talk about Bitcoin expectations for the week based on the bearish break of 28K.

In terms of the bigger picture, NOTHING has changed. The 32 to 34K resistance zone is still intact. This means if ANY bullish patterns develop below this resistance, they are MEANINGLESS in terms of swing trade or position trade strategies (longer term). Any bullish reversals that are not originating from notable support levels offer opportunities on the day trade time frames. If you are not able to interpret the price action on the bigger picture, the smaller time frames will be even more confusing so unless you have the experience, AVOID day trades.

Macro economic fundamentals AND broader price structure BOTH favor the continuation of bearish momentum. This means: IF price closes below 28K, a test of the 25K low becomes highly likely this week. IF price closes below 25K, then a test of the 22 to 20K support zone becomes a reasonable expectation.

If price manages to stay above 28K, then a short squeeze can develop, but I would not expect it to have much potential. A push to the low 30's is within reason, but again the environment does NOT favor such moves. Do not get sucked into the Bitcoin 100K hype just because everyone over reacts to one green candle.

As far as investing: Accumulating inventory below 30K is not a bad idea BUT keep in mind: Bitcoin is NOT likely to see any meaning trend reversal any time soon. If you want to buy into lows, KEEP the position size SMALL. Before Bitcoin bottoms, the macro picture needs to change, and it hasn't even started. While there is NO WAY to know with any degree of certainty, a test of 20K is possible and you MUST account for this RISK.

This is not a game of knowing what will happen next. It is a game of being prepared for possibilities. The skill is NOT in chart analysis, ANYONE can read a chart. The skill is in MANAGING RISK, minimizing emotions AND maintaining OBJECTIVITY. Technical analysis provides helpful information IF you are able to respect the RANDOM nature of the market.

Thank you for considering my analysis and perspective. I hope you find it helpful.