$12,000 Bitcoin !!!

$11,000 Bitcoin !!! Nov 30th

$10,000 Bitcoin !!! - Nov 29th

$9,000 Bitcoin !!! - Nov 26th

I was hesitant to cover this topic today but I feel that I would be doing my subscribers a disservice if were to ignore it. So at the risk of being accused of spreading FUD, here it goes.

We all know Bitcoin has had a tremendous rally this year and the total cryptocurrency market cap is now around $375 Billion dollars! Bitcoin dominates this with a whopping 58% of that total and that is what I want to focus on here.

During the first half of this year Bitcoin was marching up within a parallel channel and saw a series of big pullbacks to the lower end of that channel. In September that began to change and I noted it was beginning to narrow and could be forming a J-Curve with the lows become high. These are rare patterns that tend to end with a parabolic move that sees a climactic blow-off top. However, It’s easy to make a case for it with the price action we've seen over the past six weeks. Bitcoin has started to go parabolic and is already up 75% from this time last month.

We also have the Bitcoin futures markets kicking off next week. This will give hedge funds and the big money investors an opportunity to profit from a sharp correction. Perhaps they continue to support prices until then?

Is this an automatic sell signal? No!

Now, I’m NOT saying this is the top nor am I selling my positions here. However, we have to make note of this pattern and begin to prepare ourselves for a few possible scenarios. I am telling you to pay close attention here.

The best case scenario would be for BTC to bounce around the recent highs and build a new base of support above the $11K area. If Bitcoin went sideways here for a few weeks, I believe the altcoin market would see a huge rally.

Worst case, we see a deep pullback which would likely spill into altcoins and we settle out and consolidate for an extended period of time (weeks or even months). The fundamentals are still very bullish and I expect continued adoption and investment into cryptocurrencies in 2018. However, even with a big pullback, the longer bull market would continue.

Is Bitcoin extended?

Yes, absolutely and it’s due for a pause. The daily trend is still strong and has not been broken yet so the question is always, “do we see a quick & deep pullback” or “do we have a normal pullback and consolidation at these higher levels”?

Parabolic patterns are rare occurrence and trying to call the top is a fool’s errand. Shorting here is also risky because if it does have a blow off top, it could see another 20%-30% before topping. I've heard people calling for the top since $5k!

The challenge is getting out before the quick reaction to the downside. It’s very hard to tell since the tops can get very volatile. We’re already see that type of action over the past two weeks.

How far could it pull back?

We've had several big corrections this year and doing a quick Fibonacci retrace on each one, the first two corrections bottomed at the .618 level the the most recent one just below the .382 level. They also correlated with key price support levels.

Assuming a similar pullback from these levels, the first point takes prices back to $10,300 and the second level to $8500. Obviously this would change depending on where the pullback began.

If we say that dreaded 50% correction, then we're looking at the $7000's again. To be clear, I'm not saying this is the top but we certainly need to consider this possibility.

If this pattern begins to correct, is that the end of crypto and the Bull Cycle?

No, while we could see a decent correction, it’s well overdue and very healthy long term. Mike Novogratz has a fund heavily invested in Bitcoin and he said “Bitcoin could easily reach $40,000 by the end of 2018”. He was also quick to point out that we could see a 50% correction along the way. During a correction, I also believe a large amount of capital will flow in the altcoin market rather than exit the crypto markets altogether.

In either scenario, one thing is for sure: There will be tremendous opportunities for trading Bitcoin and Altcoins. We will see new leaders emerge and we will continue to have huge percent moves to the upside (Look at IOTA & ADA recently). If you’re taking the long-term view, then the dips offer great opportunities to accumulate more.

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