Bitcoin’s downside risk limited to $6500
During yesterday’s post and Bitcoin forecast based on Gann’s time cycles, I neglected to point out the downside risks as we approach these important dates.
1. The downside risk is/should be limited to the trend line (red diagonal line), which is around the $6500 value area. When Bitcoin first tested this trend line (left-hand side of the chart, green box with the letter x) it bounced from that area quickly, almost immediately. In fact, the daily volume bar that formed on that day was the largest we had seen since the beginning of the downtrend. Also, take note: volume was increasing in the days prior to that reversal.
2. In a worse case scenario, if price were to follow the structure of this blue arc, then we could see the $5,000 value area. That is, however, very unlikely.
It’s important to look at these levels as a gift. Think about the future valuation of this asset class – it’s in the trillions. I know it feels painful right now, especially going from nearly $20,000 a coin down to $7-8k a coin, it feels bad. But I want you to think about this: in the future, if Bitcoin is trading above 50K, will you feel upset that you didn’t buy it at a >60% discount today? You probably will. I know I would.