Bitcoin loose drawn prediction path and thoughts on movements
Recently the drop from 7400 erased 2 weeks of slow gains in less than 2 days. This made a lot of people bearish what makes me think we will have some nice chop to rekt the overleveraged, what could be tradeable if identified correctly. As the drop from 7400 was in par with the trendline break and didnt saw continuation but rather a rejection I think the chance of getting a lower high is big which will give the likelyhood to break recent lows and stay below 6k.
So ladder long 5800-5900 and short 6300-6550. exiting of the range would be a daily close below 5800 or a daily close above 6550.
anticipate a lower high around 6550-6650(wick) before a bigger drop mid-october -> short it
reaching 4700-4800 begin november -> long it
corrective bounce to 5500-5600 -> short it again
Final capitulation to 4k before accumulation starts and a new trading range is defined.
So how low can Bitcoin go?
I will try to take a educated guess. The cost of mining is averaged around 6000usd, this means most people will break-even at this price and below it will stop their mining process as the cost exceeds the profits. Ofcourse some miners have access to cheaper electricity to produce a bitcoin at a cheaper price, but that doesn't mean it will divert a lot of the mean of 6000usd because they also know that instead of selling the mined coins immediately, they could hold till the price reaches average again. In other words big miners will mine close to break even or a slight loss to accumulate bitcoin instead of selling on the open market which drops the price.
On the other hand you have the buyers aka the demand side, crypto is getting a lot of attention what differs from the bear market of 2014. Back then the infrastructure wasn't as big as now and investing in cryptocurrency needed somewhat greater knowledge and it was more shady. Nowadays you can easily buy Bitcoin with your fiat and at the same time sell it for fiat. Entering the crypto markets is so easy right now and stablecoins are being a thing, which make people can hedge the volatility if not wanting to cash out back to fiat.
So price is determined by supply and demand. Right now the supply is high because everybody that got in low have sold or are selling. As well newly mined coins are sold immediately because of the fear it will drop below average production cost.
Demand is low, because people are expecting Bitcoin lower because of the overall bearish trend. People start questioning if crypto is legit or a scam because all the fud.
So how low can it go? Well most miners shut down below 6000usd, lets say more professional miners can mine for 25% less so 4500usd but no more than 50% so 3000usd. So my guess is that the bottom will hit at 3500-4000usd per bitcoin.
Also take into consideration that the halving will happen in 2020 and that should theoratically double the average price of bitcoin to 12000usd assuming mining difficulty will not change, which makes 3500-4000usd bitcoin a great R/R to hold for 2+ years.
This is not investment advice, just a write-up of my thoughts to reflect on later.
So ladder long 5800-5900 and short 6300-6550. exiting of the range would be a daily close below 5800 or a daily close above 6550.
anticipate a lower high around 6550-6650(wick) before a bigger drop mid-october -> short it
reaching 4700-4800 begin november -> long it
corrective bounce to 5500-5600 -> short it again
Final capitulation to 4k before accumulation starts and a new trading range is defined.
So how low can Bitcoin go?
I will try to take a educated guess. The cost of mining is averaged around 6000usd, this means most people will break-even at this price and below it will stop their mining process as the cost exceeds the profits. Ofcourse some miners have access to cheaper electricity to produce a bitcoin at a cheaper price, but that doesn't mean it will divert a lot of the mean of 6000usd because they also know that instead of selling the mined coins immediately, they could hold till the price reaches average again. In other words big miners will mine close to break even or a slight loss to accumulate bitcoin instead of selling on the open market which drops the price.
On the other hand you have the buyers aka the demand side, crypto is getting a lot of attention what differs from the bear market of 2014. Back then the infrastructure wasn't as big as now and investing in cryptocurrency needed somewhat greater knowledge and it was more shady. Nowadays you can easily buy Bitcoin with your fiat and at the same time sell it for fiat. Entering the crypto markets is so easy right now and stablecoins are being a thing, which make people can hedge the volatility if not wanting to cash out back to fiat.
So price is determined by supply and demand. Right now the supply is high because everybody that got in low have sold or are selling. As well newly mined coins are sold immediately because of the fear it will drop below average production cost.
Demand is low, because people are expecting Bitcoin lower because of the overall bearish trend. People start questioning if crypto is legit or a scam because all the fud.
So how low can it go? Well most miners shut down below 6000usd, lets say more professional miners can mine for 25% less so 4500usd but no more than 50% so 3000usd. So my guess is that the bottom will hit at 3500-4000usd per bitcoin.
Also take into consideration that the halving will happen in 2020 and that should theoratically double the average price of bitcoin to 12000usd assuming mining difficulty will not change, which makes 3500-4000usd bitcoin a great R/R to hold for 2+ years.
This is not investment advice, just a write-up of my thoughts to reflect on later.
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