Is this a Relief Rally or are New Highs on the way for BTC?

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(Edited)

Is the correction over or is this just a relief rally?

Bitcoin dropped hard the last several days, from highs up around $19,500 down to lows a shade above $16k.

All together we are looking at a drop of about 17% from peak to trough.

That is in the range of "run of the mill corrections" for bitcoin during bull markets.

If you recall, I posted a post the other day talking about how 20-30% corrections were actually quite common during bull markets.

That being said, perhaps the recent selling isn't quite over yet and this is just a relief rally before more selling ensues.

Here's how things look on the daily chart:

image.png

(Source: https://cointelegraph.com/news/bitcoin-relief-rally-is-underway-can-btc-price-reclaim-18k)

Currently the price is trading around $17,800 which is almost $1,800 off of the lows, but still almost $1,800 off of the highs as well.

A 50% retracement is quite common, both on drops and on rips.

That being said, even if this is just a relief rally, I suspect the price could go a little higher still before more selling resumes.

Relief rally or is the dip over?

Personally I would not be surprised if that was it for the dip.

The reason for the dip sounds scary upon first hearing about it, more on it can be seen here btw:

https://hive.blog/hive-167922/@jrcornel/some-of-the-biggest-investors-in-btc-don-t-seem-to-be-deterred-by-the-latest-developments

However, the actual announcement hasn't even happened yet, at this stage it is just a rumor so there is no guarantee it even happens.

Secondly, even if it did happen, it wouldn't kill bitcoin by any means.

Sure, it might move some of the nefarious money involved in bitcoin to other places, such as monero or other privacy coins.

And there is the possibility that it becomes impossible to implement anyways. If there was enough push-back from users and they all stop using Coinbase, then what?

The government goes around to every exchange and imposes the same rules?

What about the decentralized exchanges?

At best (for the government), it becomes a serious case of whack a mole with the government continually being being development and crypto users.

New highs coming either way...

All that being said, the market is up a lot in a short period of time and it may need to correct a bit more before it's ready to break new highs.

That scenario may look something like this:

image.png

(Source: https://cointelegraph.com/news/bitcoin-relief-rally-is-underway-can-btc-price-reclaim-18k)

I would not be shocked if either scenario played out, but my guess is on the first one (where the bottom is already in).

Either way, we are going to new highs or we are getting one last shot at a good spot to buy.

Sounds like a win either way for bitcoin investors. :)

Stay informed my friends.

-Doc

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4 comments
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Yes, I agree, new highs either way, but, in my opinion, and as I detailed in my last post on the subject, I think the most likely scenario to be short term consolidation rather than another immediate thrust higher. But, like you say, new highs either way. 😎

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Yes it may not rocket there straight away. The debate was more or less, which comes first, new highs or $14k?

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I give 14k a much better chance, but that's not necessarily my highest probability downside target.

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What's the status / re-trace target of the CME gap over the weekend? Was it closed for Thanksgiving as well?

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