Global Markets Crashing, is BTC Done?

Blockchain & Crypto
August 6, 2024

Japan’s economic collapse roils markets worldwide, taking down all assets classes in dramatic selloffs

Monday’s market open saw the worst one-day selloff in Japanese stock market history. This was quickly followed by a 10% jump the next day. Volatility is back, so how do we trade this market without blowing up?

In my last post I talked about placing stink bids at the $60k level in BTC. That level was sliced like a hot knife through butter, as traders pushed BTC down to liquidation levels under $50k.

The chart below shows where we are at and then we’ll discuss where I think we go from here.

As we can see from the chart, BTC briefly touched the $70,000 level and immediately put in a topping candle. From there it fell off the cliff, ultimately testing the $49k area.

What I want you to pay attention to here are the wick candles.  Long wicks are like gaps in the chart. They leave price zones that almost always will be filled and retested. You don’t need to take my word for it, just look at the chart.

The question now is whether this latest wick, which is part of a candle that measured a $10k range. Look at the accompanying, massive volume candle. It is possible that we just go up from here, but I’m not willing to go all-in on that bet.

What I think is more likely in the short-term is a gradual backing and filling. The global markets are rattled. We are clearly in recession territory. We have the most hotly contested election in our nation’s history in a few months. Iran and Israel are heading towards inevitable conflict. This is NOT an environment when risk assets, of which BTC is still considered to be, are bought.

The way I’m playing it is to dollar cost average between $50k-$60k. I still believe that this cycle is not over and that BTC will see new highs. I have said those highs are likely to be $100k, possibly higher. So, buying at these levels represents a very nice potential return.

Will the wick be filled before or after $100k? We won’t know, but this trader is betting that global events and economic realities are not done taking their toll on the markets.

Trade safe.

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