BTC finally collapsed through the wedge that has been building since July, falling from $9,785 and wicking down as far as $8,000, in a widely anticipated move that wiped $40 billion off the market. The drop, which had been getting more and more predictable given Bitcoin’s behavior over the past few days, impacted every single asset in the market, with over 99% of tokens dropping by double figures, and even big caps like BCH and EOS falling by 22%.
November 2018 All over Again
The collapse is reminiscent of November 2018 which saw a months-long wedge resolve itself in a similar way, with Bitcoin experiencing a 50% haircut over several days. Only time will tell if a similar scenario is on the cards this time round. The fall was also a feather in the cap for those who believe that Bitcoin will eventually fill ‘gaps’ left by CME futures, with the current resting place of $8,500 being one of these gaps, and being a range we predicted BTC might revisit when the parabola to $14,000 was eventually broken in mid-July. Those who believe in the gapping theory will be pleased to know that there is now only one left to be filled – $11,700.
Where Now for the Market?
Where we go from here is a difficult question to answer before the dust has settled. Crypto Twitter was awash with the usual talk of buying the dip, $5,000 targets, and the start of a road to all time highs. Those searching the tea leaves for signs of an alt season would have been disappointed that Bitcoin dominance has risen 2.5% this week following a five-day correction, suggesting that, for the time being at least, alts will continue to stagnate and suffer. Of course, no one knows how long Bitcoin will remain in this range and in which direction it will go next, but if there’s anything we can take solace from, it’s that this pattern is usually the way these situations resolve themselves:
To that extent, if you’re still hodling it might be wise to keep on doing so and just see out this period of negative movement, given that the fundamentals all line up for an epic 2020 for Bitcoin and selling now might see you selling the bottom, or near it.