Amidst the Raging Bitcoin Bull Market, This Analyst Still Sees a Fall to $3k
- Bitcoin makes new 2019 highs but we could pullback to test $10k
- While the market is ultra bullish, Crypto analyst Magi Poop Cannon assesses the “very real downside risk”
Bitcoin is flying high having shot past $10,000 and hitting $11,200 a new high of 2019 that was last hit in March 2019. The market is extremely bullish right now with the FOMO level being hit. This has the experts calling out an uptrend only to experience a few retracements of about 30 percent during this cycle, as we did in the last bull cycle.
However, one analyst is still calling out a hard crash and that’s Magic Poop Cannon who is standing firm on his ground that we would see $3,000 after having surged 185 percent till date in 2019 following the dump to $3,150 in 2018 which majority of the analysts called the Bitcoin bottom.
On the ongoing move, Magic sees us pulling back to test $10k, “we're in the big leagues of volatility right now.”
In his latest analysis, Magic shares how despite the whole world being ultra bullish on crypto, we need to pay heed to the fact that it is a highly volatile market. Though Magic says he doesn't want to spread FUD, he did say, we need to asses the “very real downside risk.”
A Head and Shoulder pattern to Take us to $3k
On the daily BTC chart, Magic says it is printing several divergences on the indicators while exploding to higher highs. This he says means we could be coming to the end of this rally as “we aren't going to go up forever.”
As we are seeing currently Bitcoin is in a very clear uptrend, acknowledges the analysts and he doesn’t see Bitcoin falling right now, however, there is weakness building in the underlying indicators that aren’t supportive of a continuation in this parabolic move.
One such possibility is that Bitcoin could form a head and shoulders pattern, with the left shoulder already formed and we may be half way through a head. But there isn’t “enough evidence” to support it yet.
And this is how he comes to the drop to $3k.
The five capital sins in crypto trading:
1. Repeatedly trade against the trend
4. Fade breakouts
5. Don't respect stop losses
— Alex Krüger (@krugermacro) June 22, 2019
Providing an extension to this pattern, he says to complete a head, we would go down to the low $7,000’s. From here, in order to form a right shoulder, it could take us all the way back down towards $3,000.
“Don't think for one second, that downside risk doesn't exist,” warns Magic.
NVT (network value to transaction indicators) has never failed in the entire history of Bitcoin, Magic said. This doesn't mean NVT can’t fail but it has a great track record thus far. And when NVT finally throws a hard sell signal, that would be when we would see a “catastrophic” fall like this.