I stated in my last 2 Bitcoin posts Bitcoin: Critical Decision Time Coming Soon that i expect this rising trend line ABCD will fail to support prices.
And this break down has begun. The question now is how low will it get? To answer this question, let's look at the following weekly chart.
This long term weekly chart is revealing.
First of all, after basing for nearly 3.4 years (sorry should read 3.4 years, not 4 years), the basing ended in April 2017, and then the price broke out and did a parabolic run until the ATH in Dec 2017.
Note: Should read 3.4 years, not 4 years in the following chart.
During that dizzying parabolic run of 2017, every time the prices correct, they pulled back to the rising trend that marked by "A" to "D" in the 2 chart above.
So you can say that the Bitcoin market has been in a bull market since the breakout in April 2017. And every time it corrected, it bounced off this rising trend line ABCD.
Just 3 days ago, the prices broke down from this rising trend line. The 3 logical targets are shown as T1 to T3.
T1 = $5,850 - $6,000. This is the YTD bottom or previous low where it staged an almost 100% dead-cat bounce. Relief rally is typically quite strong. I entered a long trade during this bounce. I'm certain that price will at least come down to test this level.
T2 = $3,100 - $3,400. Bitcoin had three 80+% corrections in the past. So if prices bottom at this level, it's about 85% from ATH. So Bitcoin can chalk up yet another 80+% correction into the record book. This is likely the most probable target.
T3 = $1,850 - $1,900. This should be the final target, if Bitcoin gets this low. I don't think prices will get this low. But if it does, then all the gain since the breakout in April 2017 is almost completely unwound. It's actually about 90% unwound.
I've said a few times before. With a market where prices is as volatile as Bitcoin, HODLing isn't a good strategy.
If you didn't sell near ATH of $20,000, after a drop to T2 or 84%, in order to break even, Bitcoin price would have to rise 530% ! Imagine you buy it at T2 and you see your money up 530%.