Everyone that is buying Bitcoin right now wants to know the same thing. When will the next major correction come? The answer is not quite clear but the math provides us a glimpse into what the future holds...
Bitcoin has been moving well above its long-term moving averages lately and is overdue for a serious correction. Normally this would happen once a major psychological barrier is hit, like the last time when we touched $3K. There was a 50% correction (according to Fibonacci Retracement) which landed BTC back at $1826. Now we are looking at $4492 as the record high with our sights set on $5K psychologically.
Will we reach this target first or face a steep retracement downwards before then?
As markets are heating up we have seen jumps of $200, $300 and even $400 in a single day so anything is possible. The market can contract just as quickly though so beware.
In this chart I have the one year moving average set (red line) using Bollinger Bands. Bitcoin always returns to the moving average eventually so keep this in mind. I have made three colored dots in zones where Bitcoin is likely to retrace to if we face a major retracement over the next couple of days.
Major Retracement Levels:
- Blue dot ($2850)
- Green dot ($3150)
- Yellow dot ($3500)
Keep an eye on market movements as this sort of retracement usually occurs over several weeks of sell-offs. Last time it took just over 4 weeks to go from $3,000 down to $1826. The total market cap went from over $116B down to around $61B. If we hit $5K and then have a serious sell-off we could drop down to the $3500 range very easily.
We are still in a bull market but a reversal could happen any day now. Follow my daily price forecasts for indicators as to when this will happen and stay on top of the market conditions :)
*Never invest more than you are willing to lose and always do your own research before making any investment decisions.
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