Our recent downtrend line (dashed red line) has been caused mostly by interest rate hike fears (and Matt Damon...), and on January 20 we ran straight into that downtrend line with an RSI at 30 and a down swinging MACD. Stock market risk assets still selling off, Russian bank suggesting a ban of crypto, etc. There was some support around $41k and we were already below the main moving averages, but support in crypto is fickle and risk-on markets are rarely the first to buck the trend when the Fed is changing hawkish.
This week is different. Rate hike news has more than run through the market and oversold indicators are ringing. The last two times we saw an RSI like this (mid teens a few days ago) was May 2021 and March 2020, both times just before explosive upswings. The MACD is in an upswing and we're way below the 200 day MA. The stock market is showing signs of an oncoming bear to bull reversal (see the the semiconductor charts, and follow Google's earnings this week). Crypto miners are moving from Russia just like they did with China.
And look how far back this trendline goes...
I believe our next leg down would hold in the 29-32k range, but I think it's time to add starting now, and thats what i'll be doing. I think the long term bears at this point are either betting on $30k or $0, so they're all-but washed out by this now. Usually I'd wait for a double bottom, but soon after we break this downtrend, I believe its going to be a strong swing up fueled by everyone from retail investors to big banks. Might be the swing that takes us to new ATH, so I'll risk a 10-15% further down to hold the possible 100-200% upside.
**NOT INVESTMENT ADVICE etc etc. For all I know, Putin invades Ukraine and WW3 sends markets into the dark ages.**
This week is different. Rate hike news has more than run through the market and oversold indicators are ringing. The last two times we saw an RSI like this (mid teens a few days ago) was May 2021 and March 2020, both times just before explosive upswings. The MACD is in an upswing and we're way below the 200 day MA. The stock market is showing signs of an oncoming bear to bull reversal (see the the semiconductor charts, and follow Google's earnings this week). Crypto miners are moving from Russia just like they did with China.
And look how far back this trendline goes...
I believe our next leg down would hold in the 29-32k range, but I think it's time to add starting now, and thats what i'll be doing. I think the long term bears at this point are either betting on $30k or $0, so they're all-but washed out by this now. Usually I'd wait for a double bottom, but soon after we break this downtrend, I believe its going to be a strong swing up fueled by everyone from retail investors to big banks. Might be the swing that takes us to new ATH, so I'll risk a 10-15% further down to hold the possible 100-200% upside.
**NOT INVESTMENT ADVICE etc etc. For all I know, Putin invades Ukraine and WW3 sends markets into the dark ages.**
