Bitcoin (BTC) is still in a downtrend. The price action looks weaker with every passing day and volume continues to dwindle. Buyers and sellers on most exchanges are now a limited number of cryptocurrency day traders. Big hoarders including some institutional investors are shopping mostly over the counter (OTC) thus having no impact on the price or volume of Bitcoin (BTC) on exchanges. Since the beginning of this downtrend, Bitcoin (BTC) has followed an interesting pattern of false hope for 77 days interval.
The way this works is that Bitcoin (BTC) falls aggressively during the beginning of the 77 day cycle, as can be seen on the chart. At the end of the cycle, Bitcoin (BTC) signals a false hope. This leads investors into thinking the price has started to recover but it does not fully recover and then falls again towards the middle of that 77 day period. At the end of each cycle however, a false hope signal is generated. Whether this is bot activity or the result of manual buying and selling is hard to tell, but one thing is very clear. This has systemically made investors comfortable with the downtrend. If it had been one aggressive fall to $5,000 many investorswould have panicked and the sellers would not have had the chance to sell their bags for a better price.
Bitcoin (BTC) is once again close to the end of a 77 day cycle with a similar false hope signal. This means that at the beginning of the new cycle, in mid July, most investors will again be confident that the price has finally started to recover. However, to the very contrary, Bitcoin (BTC) will again start to fall and will test a lower level this time. One thing to bear in mind though is that this is not the time to go short on Bitcoin (BTC). The risk/reward at this point does not favor a short entry as this will probably be the last of the 77 day cycles at the end of which a reversal is highly probable.

Despite a gloomy outlook for the time being, long term prospects for Bitcoin (BTC) have never been better. The price just bounced cleanly off the 21 EMA and is currently above our monthly Bitcoin (BTC) trend line (shown in green). If this holds, we can expect Bitcoin (BTC) to repeat 2013 and have a run up to above $50,000 possibly by the end of the year. It is important to note that the recent correction is not a bear market by any definition. It was merely a correction which should have been expected after an exponential rise. The price action is still very bullish on the monthly timeframe and a bull run can be expected at these levels. In the grand scheme of things, it is not going to matter much if you bought at $6,000 or $5,000. However, for professional investors with an emphasis on risk management, it is best to wait it out at least for the next few weeks.