Hi guys. A lot of people have asked us to give an update after yesterday’s dramatic Bitcoin drop.
If you’re holding Bitcoin or other coins, you might be nervous at this point. Maybe even panicking. But I’m happy to say that you can be completely calm. Take it easy. Don’t sell anything.
What is going on?
What we’re seing now is a market correction, or what is also known as a retracement. What this means is that after the price of a market has gone up for a while, it HAS TO move down again a little bit. If it doesn’t the market cannot continue to go up in the long run. It will not be healthy and solid. This goes for all markets, not just coins. It’s the same for the housing market, the stock market – any market!
So just to be clear guys. This retracement is a GOOD thing, and a HEALTHY thing for Bitcoin. It will make Bitcoin stronger, when it goes to new ATH’s very soon.
As charters we know that these retracements will happen, and using the indicators we have shown in our videos, we have been able to predict pretty accurately, what has happened in the last few days. As we wrote in our Christmas dump update 4 weeks ago:
“Should this level break after a bounce, we are probably going to go all the way to 8,000 – 8,800 level, which would be past resistance becoming support and very likely a reversal. It is not unlikely at all that we’re gonna go all the way to this level, which would create a very sound foundation for a futher uptrend to new heights.”
What caused it?
A big retracement in Bitcoin is always triggered by one or more macro events. In this case the main cause was most likely a lot of media FUD about South Korea and China wanting to ban or restrict coin trading. China also moved closer to banning mining. These stories were all over the big media outlets in Europe and The US and caused many small investors to panic.
At CoinRunners we don’t see any reason for concern over stories like this. Most countries are moving to restrict or even ban coin use. But this should be seen as part of coins maturing and becoming part of the mainstream economy, and something that we have predicted as a main theme for 2018.
A huge volume increase on Bitcoin shorts on CBOE and CME has also added to the downtrend, as futures here get settled on Jan 17th and Jan 26th. Investors are trying to maxmimise their profits before these dates.
What will happen next?
At the time of writing Bitcoin has bounced just below $10,000 and will probably move up a bit, maybe as high as $12,500. After that we still expect it to continue it’s retracement down to a little over $8,000. This could take several days of course, possibly converging with the CME futures settlement on Jan 26th as the bottom.
When this level has been reached, we expect Bitcoin to consolidate and get ready for a new, long uptrend, so hang tight guys and get ready for the moon! 🙂