Crypto Analysis Report 11-17-18 The Infamous $6000 Was Breached…Now What???
After many months of holding off the sellers, the $6000 level was finally breached. I talked about this level in my second post ever on Steem nine months ago.
At the moment, there is a war taking place between the buyers (Hedge Funds) and the sellers (Retail Investors) called capitulation. That line in the sand was at $9000. Capitulation is when investors give up any previous gains, by selling, in an effort to get out of the market. Capitulations are outcomes that result from the maximum psychological and financial pain that can be endured by a group before throwing in the towel. The Retail Investors are throwing in the towel after seeing a more than 50% correction in the Bitcoin price to the buyers, the Hedge Funds. With 100s of millions of dollars to invest, we are witnessing an accumulation phase by the Hedge Funds between $6000 and $9000.
The Hedge Funds are loading up and buying from the Retail Investors. But to fill all their buy orders, as the sell orders dry up, price must go down to the next stack of sell orders. We are approaching what I believe will be the bottom of bitcoin at $6000. My first target is $12,000 and my second target is $17,000 over the next 3 - 9 months.
NOTE: we came within $150 of my first target and….well, you know the rest of the story.
Recently, one of the more popular crypto bulls, Thomas Lee of Fundstrat Global Advisors cut his bitcoin target in half when he lowered his year-end target to $15,000 from $25,000.
A key driver was bitcoin's "break-even" point, the level at which mining costs match the trading price. That level is down to $7,000 from an earlier estimate of $8,000 for the S9 mining machine by Bitmain, according to Fundstrat's data science team. Based on that, Lee estimates that fair value for bitcoin would be roughly 2.2 times the new $7,000 break-even price.
But Lee is betting on a recovery. He told clients in a note Friday that even in the depths of a previous bitcoin bear market between 2013 and 2015, it "never sustained a move below breakeven."
Still, Lee is bullish on more institutional involvement bolstering prices into the end of this year. The launch of ICE, Starbucks and Microsoft-backed Bakkt and Fidelity entering the market is "part of a broader creation of infrastructure necessary for institutional involvement," he said.
So we had a breached of $6000 and a potential year-end target of $15000.
The next level to pay attention to on the downside is the daily demand at $4800, which sits on top of the weekly demand at $4400. The chart suggest, price will fall down to these levels, then bounce higher from there.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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by rollandthomas
$4,400 looks good to me as well and may tempt me to get back into bitcoin directly given the fundamentals I see providing good long term support. I am looking closely at volumes if we get there as we need large volumes to signal the reversal in my opinion.
Great point, where do and how do you view volume...do you just place it on your chart?
Thomas Lee is one of the few major crypto voices worth listening to. I have thought about cutting my own end year target too (which was pretty much the same as his). I'll go with what he's saying now.