Why Crypto is En Route to the Longest Bear Market in History


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By CCN.com: The crypto market is en route to experiencing the longest bear market in its 10-year history.

As Ran Neuner, the host of CNBC’s Crypto Trader said, if the latest bear market lasts for another month, it will surpass the 420-day correction the crypto market experienced from 2014 to 2015.

“If this bear market continues for another month it will be the longest bear market in Crypto history; 2014/15 – 420 days. 2018/19 -390 days,” said Neuner.

What is Triggering the Crypto Bear Market to Extend Across 2019?

In 2017, the cryptocurrency sector experienced its greatest ever bull market. The Bitcoin price surged from less than $1,000 to $20,000 at its peak while other major crypto assets in the likes of Ethereum and Ripple recorded 200-fold gains within a 12-month period.

Prior to December 2017, when the cryptocurrency market achieved an all-time high valuation at over $800 billion, Ethereum co-creator Vitalik Buterin suggested that the valuation of the market is not sustainable due to the lack of progress made by both base blockchain protocols and decentralized applications (dApps).

At the time, Buterin said:

So total cryptocoin market cap just hit $0.5T today. But have we earned it? How many unbanked people have we banked? How many dapps have we created that have substantial usage? Low added value per user for using a blockchain is fine, but then you have to make up for it in volume… The answer to all of these questions is definitely not zero, and in some cases it’s quite significant. But not enough to say it’s $0.5T levels of significant. Not enough.

Since then, the valuation of the cryptocurrency market has fallen from $500 billion to $119 billion, by well over 76.2 percent. From its all-time high, the cryptocurrency market dropped by 85 percent.

The cryptocurrency market, at its peak in late 2017, reached a valuation of $0.8 trillion.

The recent crypto bear market is likely going to be the longest correction in its history because of the level of awareness the asset class gained at its peak in 2017.

Many new retail investors and individual traders entered the cryptocurrency sector at its highest point and recorded substantial losses in a short period.

Vinny Lingham, a venture capital investor and the CEO of Civic, said that it may take a long time for investors to psychologically recover from the bear market, which may contribute to the time frame of the correction throughout 2019.

In November 2018, Lingham stated:

I think it stays in the range between $3,000 to $5,000 at least for three to six months. I don’t think we break through the support level of $3,000 just yet. I think there is a lot of buying in the short-term around that mark. If we don’t get out of the crypto bear market cycle in the next three or six months, the $3,000 level could go.

2019 Set to be a Boring Year

Analysts generally perceive 2019 to turn out to be a boring year for investors with a low level of volatility and a lack of breakouts above key support levels for major crypto assets.

If the crypto market remains in the $100 to $400 billion range in market cap by the end of February, it will officially be the worst and the longest bear market in the history of the asset class.



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2019 a Year of Accumulation For Bitcoin, Recovery by Year’s End


Bitcoin could see a recovery by the end of 2019. | Source: Shutterstock

In the past 24 hours, the crypto market has recovered from $120 to $123 billion as the Bitcoin price avoided a further drop below the $3,600 mark.

bitcoin price
The bitcoin price avoided a further drop below $3,600.

Ethereum has also been able to rebound relatively quickly from the delay of the Constantinople hard fork, which initially caused a 10 percent drop from $130 to $116.

Slow Grind Up For Bitcoin Expected in 2019

Due to the intensity of previous sell-offs, there exists a strong possibility that the price of BTC and other crypto assets drop below key support levels in the short term.

Some analysts see the dominant cryptocurrency declining to its 12-month low at $3,122 in the last phase of the year-long bear market before recovering by the year’s end.

Eric Thies, a cryptocurrency technical analyst, said that similar to the price movement of Bitcoin in 2015, the asset may initiate a strong upward movement by the end of 2019.

“Similar to 2015, 2019 may be the year of accumulation,” he said, even if the asset demonstrates wild volatility in the low range of $2,000 to $4,000 in the weeks to come.

However, in the upcoming months, a cryptocurrency researcher Willy Woo, best known for his work at Woobull.com, said that the on-chain volume of Bitcoin remains relatively low to suggest the establishment of a proper bottom.

Woo explained that while the steep drop of Bitcoin from $6,000 to $3,122 led to an increase in volume, it did not show any sign the initiation of an accumulation period.

He stated:

Despite the technical setup that suggests bullishness is possible, there’s not a lot on-chain volume to fuel a prolonged up move. What we saw in the last 7 weeks was a spike of on-chain volume driven by volatility, coins moving to exchanges to trade. The initial volume spike false signalled a faster detox and an earlier end to the bear market, but in fact it was a volatility side effect. That move from $6k to $3k created immense trade volume, but it was in no way a signal that accumulation volume had begun.

It may take Bitcoin and other major crypto assets well over several months to begin showing evidence of accumulation in the cryptocurrency exchange market and on over-the-counter (OTC) trading platforms.

Until then, most analysts expect a high level of volatility in a low price range, which may lead BTC to revisit its yearly low.

What Will Happen to Small Tokens

As BitMEX CEO Arthur Hayes suggested, tokens and small blockchain networks with weak fundamentals and user bases are likely to struggle throughout 2019.

Especially if Bitcoin endures another correction prior to establishing a bottom, perhaps by the end of the second quarter of 2019, illiquid and low market cap crypto assets could experience a free fall without sell pressure, resulting in large losses against both Bitcoin and the U.S. dollar.

Featured Image from Shutterstock. Price Charts from TradingView.



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Could Bitcoin Initiate a New Bull Cycle by 2019? One Trader Thinks So


In the last 24 hours, the cryptocurrency market recovered by $4 billion as the Bitcoin price rebounded above $3,700.

Several major crypto assets in the likes of Ethereum and TRON have recorded large gains on the day, rising by more than three percent against Bitcoin.

Even if the price of Bitcoin and other crypto assets continue to decline substantially in the first two quarters of 2019, one trader sees the market massively recovering by the end of 2019.

How Can Bitcoin Initiate a Big Rally by the End of This Year?

bitcoin price
Could the Bitcoin price make a major recovery this year? One analyst thinks so.

Generally, analysts in the cryptocurrency space expect the correction of the asset class to be extended throughout the first half of this year.

Since November 2017, Bitcoin has shown a lack of momentum, struggling to break out of key resistance levels in the $5,000 to $6,000 range.

The lack of strength in the short-term trend of the dominant cryptocurrency has led other digital assets, especially cryptocurrencies with low market caps and volumes, to perform poorly against the U.S. dollar.

History Suggests Recovery in Near Future

Still, in the latter half of 2019, one cryptocurrency technical analyst with an online alias “Galaxy” said that based on the historical price movement of Bitcoin, the asset could demonstrate large gains in 10 to 12 months.

The analyst said:

‘The future lies in the study of the past’ We’re approaching the 420 day mark which ended the 2015 bear market and if history repeats itself, we’re moving towards several months of accumulation and a new bull cycle starting mid-late 2019.

Historically, Bitcoin had taken on average 62 weeks to recover from an 85 percent correction throughout the past nine years. 15 months since the start of the bear market in January would be March of this year.

Willy Woo Eyes Q2 as Crypto Market Bottom

Some analysts believe that the cryptocurrencies are in the last phase of the bear market and could begin showing signs of recovery by the second quarter of 2019.

Willy Woo, a prominent cryptocurrency researcher and the founder of Woobull.com, said prior to the large drop in the Bitcoin price in late November:

Putting together the blockchain view, I suspect the timing for a bottom may be around Q2 2019. After that we start the true accumulation band, only after that, do we start a long grind upwards.

Market Moves by Cycle

bitcoin price crypto market cycle
Investors should remember that the cryptocurrency market moves in cycles.

The cryptocurrency market is rarely affected by emerging events or news. Rather, the market primarily moves based on sentiment.

For Bitcoin and other crypto assets to rebound and engage in an accumulation phase, the market has to become revitalized once again.

Similar to the movement of Bitcoin in 2017, some analysts see a boring year ahead for crypto assets in 2019 but are not dismissing the potential of digital assets experiencing an abrupt surge in value approaching the end of the year.

Currently, the volume of Bitcoin remains high at $5.7 billion, and the trading activity in the cryptocurrency market has increased by a relatively large margin, suggesting that bulls are demonstrating some resistance in a low price range.

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Following $5 Billion Drop in Crypto, Traders See Weakness in Bitcoin


On January 13, the crypto market initiated an intense sell-off as the Bitcoin price fell below the $3,500 mark.

The weakness in the short-term price trend of BTC led the market to demonstrate volatility on the downside. More than $5 billion was wiped out of the crypto market and major assets like Ethereum recorded a six percent drop.

Where is Bitcoin Headed?

Generally, both analysts and traders expect Bitcoin to fall to the low $3,000 region in the days to come. Some have suggested that a strong buy wall below the $3,000 mark may allow the dominant cryptocurrency to recover, implying that a 10 percent fall remains a possibility.

Bitcoin Price Could Fall Toward $3,000

In the short-term, Cred, a cryptocurrency technical analyst, said that BTC could test the $3,430 support level first. Depending on the movement of the asset at $3,430, the asset could initiate a corrective rally or continue a steep drop to low $3,000.

“I am interested in the $3,430 level. It’s the HTF (M1/W1/D1) low that price blew through without a retest,” the analyst said.

Hsaka, a cryptocurrency trader, echoed the sentiment of Cred, adding:

“$3,430 is the next level of interest for me on the daily. Won’t be blindly punting a long there, but will watch for PA to develop on the LTFs.”

Will Growing Trading Volume Buttress Market?

In the last 12 hours, the daily volume of the cryptocurrency market has recovered from around $13 billion to $16 billion, by 23 percent.

The volume of Bitcoin has increased from $4 billion to $5.1 billion, demonstrating a fairly large jump in trading activity in a short period of time. The resistance in the $3,400 to $3,500 range may prevent an abrupt fall by a large margin in the upcoming days.

On January 13, when the volume of Bitcoin was hovering at just over $4 billion, analysts expressed concerns in regard to the lack of sell pressure on the market.

Often, if the price of an asset falls substantially on the day, the volume spikes as sell orders are filed across major exchanges. However, on Sunday, Bitcoin recorded a three percent drop with low volume, essentially free falling without high sell-pressure.

The growing volume of the cryptocurrency market could alleviate some of the pressure major crypto assets have faced on the day.

Crypto Forecast Still Gloomy

bitcoin price cloudy
Bitcoin and other crypto assets face a bleak forecast.

While cryptocurrencies are not likely to experience a large downward movement in the next 24 to 48 hours, the market still remains gloomy.

As Bitcoin failed to break out of $3,600, Hsaka said that previous lows are likely to be retested, in the $3,400 region.

“Clear rejection on LTFs. Confluent with a HTF S/R flip. Retest of the previous low (white level) seems likely to me,” the trader said.

Most of the worst performing cryptocurrencies in the past 24 hours have been tokens and low market cap cryptocurrencies, and small digital assets are expected to perform poorly in the short-term.

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Tim Draper Made $89M+ From His Bitcoin Investment in 5 Years


Billionaire venture capital investor Tim Draper has made $89.1 million from his Bitcoin investment in less than five years.

In 2014, Tim Draper purchased a bulk of 30,000 BTC from the U.S. authorities in an auction. He outbid all participating investors by paying $632 per Bitcoin, with a slight premium.

The $18.96 million he spent in 2014 is now worth $108 million despite the 80 percent correction the dominant cryptocurrency experienced in the past 12 months.

Money Makes Money: Bitcoin is a Prime Example

Vinny Lingham sees 80% drop in bitcoin
Vinny Lingham

Previously, as CCN reported, a South Africa Shark Tank host and Civic CEO Vinny Lingham suggested that the cryptocurrency market may take a long time to recover from its correction.

Lingham explained that the 2017 bull rally of digital assets was primarily triggered by retail traders and individual investors, and the vast majority of the investors lost a significant chunk of their capital in the recent correction.

Psychologically and financially, he noted that most investors who lost out massively in the cryptocurrency bear market may need years to recover.

“The crypto market will rise again, but most likely only when the pain of the recent fall becomes a distant memory. Don’t underestimate the power of psychology in free markets,”

Lingham said.

However, investors like Draper who have invested a small portion of their net worth that does not have any major impact on their portfolios have been able to survive numerous bear markets and long-lasting corrections.

In an emerging market like crypto, it is highly risky to invest more than one can risk losing entirely. In one year, cryptocurrencies may rise by 300 to 500 percent. But, the following year, the asset class may plunge 80 to 90 percent in value within a several-month-period.

What Long-Term Bitcoin Investors See

Investors that have a strong belief in the potential of the technology and the ability of an uncensorable form of money to provide financial freedom to billions of people across the world in the likes of Tim Draper, Mike Novogratz, and Peter Thiel hold onto their investments year after year, acknowledging the high risk involved.

As Tim Draper wrote in an op-ed:

“The long-term vision for bitcoin is to give the world economic emancipation. The potential if bitcoin is only limited by the imaginations of the entrepreneurs who work to drive this new virtual economy. To monitor and keep it honest, I believe that the community of users will ultimately self-regulate, possibly eclipsing or obviating the need for the various governments to regulate the crypto world. I’ve been through the ups and downs with bitcoin, and I am as certain as ever that the bitcoin revolution is coming.”

Investors that have held onto the dominant cryptocurrency as a long-term investment expect the asset to eventually compete against gold and other types of safe-haven assets to become a multi-trillion dollar asset.

Currently, Bitcoin is an alternative currency at its infancy, working to increase merchant and mainstream adoption. As such, every major correction it undergoes grows its resilience.

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Japan Not Considering Approval of Bitcoin ETF, FSA Denies Reports


According to a spokesperson from the Financial Services Agency (FSA), Japan is not considering the approval of a Bitcoin exchange-traded fund (ETF).

Speaking to Bitcoin.com, an FSA representative said:

There is no such fact that we are considering approving ETFs which track crypto-assets at present. We are not currently considering approving them.

Japan Doesn’t See the Need for a Bitcoin ETF

Last week, several sources including Bloomberg reported that Japan is exploring the possibility of approving Bitcoin ETFs as an alternative to Bitcoin futures.

The reports led to an increase in anticipation toward the approval of the VanEck Bitcoin ETF filing that is set to be decided by the U.S. Securities and Exchange Commission (SEC) by the end of February, as the emergence of strictly regulated investment vehicles in a major market like Japan would decrease the risk of price manipulation.

However, in a statement, an FSA spokesperson said that the agency does not recognize the necessity of any cryptocurrency-related derivatives as of now, solidifying its stance against both crypto ETFs and futures products.

“Taken it into consideration that it is difficult for us to find constructive and social significance of trading crypto-assets derivatives at present, we think that there is no need for trading crypto-assets derivatives at financial instruments exchanges where many market participants are able to trade,” the representative explained.

bitcoin etf vaneck bitcoin price
Japan was reportedly going to approve a Bitcoin ETF, but regulators have squashed that rumor.

Previously, Jake Chervinsky, a government enforcement defense and securities litigation attorney at Kobre & Kim, said that while the launch of an ETF in overseas markets could address what the SEC considers as a key issue in manipulation, it is likely to have a minimal impact on the decision of the SEC.

A Bitcoin ETF in Japan or any other major cryptocurrency market was never going to have any effect on the decision of the U.S. SEC, as the commission prefers to operate as the leader in international regulation.

But, it demonstrates the willingness of the FSA and the Japanese financial authorities to focus on strengthening the infrastructure of the local cryptocurrency exchange market rather than shifting to investment vehicles that could provide the asset class with mainstream exposure in a short period of time.

Bitcoin ETF Proposals in the U.S.

Throughout the past several months, ten ETFs have been rejected by the U.S. SEC for various reasons including manipulation and security risks.

Since then, companies in the likes of VanEck and Bitwise have filed ETF proposals that address most of the issues the SEC laid out publicly in the past.

Bitwise, for instance, a cryptocurrency hedge fund which filed an ETF proposal this week, has built an index to track the price of Bitcoin on exchanges, futures markets, and over-the-counter (OTC) trading platforms in an attempt to find an accurate price of the dominant cryptocurrency based on maximum daily volume.

Regardless of the progress made in overseas markets, the U.S. SEC will likely continue to identify areas of improvement following the rejection of every ETF filing, which would eventually increase the probability of a Bitcoin ETF in the long run.

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Bitcoin Price Will Tank Below $3,000, Says Trader Who Predicts Sell-Off


The bitcoin price will crater below $3,000 amid a mass sell-off. That’s what futures trader Anthony Grisanti predicts about the ongoing Crypto Winter.

“I’m looking for a move down to $3,000, which would represent a real weakness in this market,” Grisanti told CNBC. “It could be the driver that gets people to bail out of this and push it even lower.”

Trader: ‘People are Liquidating Their Positions’

Grisanti is a CNBC analyst who previously traded energy futures at Bear Stearns. Like other crypto bears, Grisanti believes it’s only a matter of time before bitcoin collapses.

He attributed the recent price volatility to investors selling off their bitcoin holdings as they head for the exits. “Every time this market does run, people are liquidating their positions,” Grisanti says.

Whether or not they’re liquidating outright or the futures, they are liquidating. So I’m looking to sell this. At $3,800 is where I want to sell it. There’s some resistance around $4,000, $4,100.

CNBC scott nations anthony grisanti talk bitcoin
CNBC commentators Scott Nations and Anthony Grisanti: Bitcoin is dying.

Grisanti’s fellow CNBC commentator, Scott Nations, also bashed bitcoin, saying it has no value and that he’d short it if he could.

“There’s no value there,” says Nations, a former member of the Chicago Mercantile Exchange. “I absolutely want to be short [on bitcoin].”

‘Baby, This is a Bubble!’

Nations also dissed millennial crypto enthusiasts, saying they’re too clueless to understand the bubble they’re witnessing now.

“If you are in your 20s, you have never seen an asset bubble,” Nations says. “You were a teenager during the housing bubble. You were not even a teenager during the dotcom bubble.”

Well, baby, this is a bubble! And right now, it’s coming unglued.

I hope that people don’t lose too much money on bitcoin, but that they do learn the lesson: This is a bubble, and this is how it unwinds. Unfortunately, it’s a bit painful, but we have not reached the bottom yet.

Analysts: Interest in BTC Futures is Waning

Both Anthony Grisanti and Scott Nations say they believe that interest in bitcoin futures is waning because of the current market slump.

As CCN reported, Nasdaq — the world’s second-largest stock exchange — plans to launch bitcoin futures in the first quarter of 2019 through a partnership with investment firm VanEck.

Similarly, Nasdaq’s rival ICE (Intercontinental Exchange) — the parent company of the New York Stock Exchange — also plans to roll out a physically-settled bitcoin futures product in the first quarter of 2019.

Crypto Bear: BTC Fans Are like Trump Supporters

But the CNBC bitcoin bears are skeptical that there’s a market for BTC futures, and that believers are merely deluding themselves.

“I think the interest is out of the market,” Grisanti says. “Yeah sure, like Trump supporters, there are a few that believe this thing is going higher, [even] as they have their losses every day.”

Grisanti says this is not the right time for bitcoin. “Maybe another currency comes to the forefront,” he speculated.

Grisanti says the bitcoin price is fluctuating between lows of $3,300 to $3,500 and highs of $4,000 to $4,100. And he doesn’t see any hope of a breakout.

These Trump Supporters Are Bitcoin Bulls

For the record, Trump supporters include billionaire Peter Thiel.

Thiel — the openly gay co-founder of PayPal — has touted bitcoin as “digital gold.” Thiel’s net worth tops $2.5 billion.

Trump supporters bitcoin bulls Mick Mulvaney Peter Thiel
These Trump supporters are bitcoin fans: Mick Mulvaney and Peter Thiel. (YouTube)

Another Trump supporter is this guy: Mick Mulvaney, the acting White House Chief of Staff. Mulvaney has been a bitcoin advocate since 2014.

Mulvaney is currently director of the Office of Management and Budget (OMB). His job as OMB boss is to prepare the US President’s budget proposals to Congress.

It is a very influential position at the right hand of the most powerful executive in the world. And the guy who holds that job is a bitcoin fan.

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Bitcoin Price Dangerously Close to ‘GTFO’ Level: Analyst Mark Dow


For most of 2019, bitcoin and the wider cryptocurrency market rode a bullish wave, as a reduction in short-selling allowed prices to creep higher. However, on Thursday the bitcoin price crashed below the $4,000 mark, and now one prominent trader warns that it is dangerously close to approaching a level where even bulls need to “GTFO.”

Mark Dow Sounds the Alarm on Bitcoin

That trader is Mark Dow, a former IMF economist who famously shorted the bitcoin price from near its all-time high in 2017 to below $3,750.

bitcoin price
The bitcoin price endured two nasty drops on Thursday.

Commenting on Thursday’s two-step drop from above $4,000 to below $3,600, Dow said that the flagship cryptocurrency’s technical indicators were not pretty.

“Nasty little air pocket in #bitcoin. If you are a crypto bull, you no NOT want to see this red line broken (~3550). Would be a very bearish sign,” he tweeted on Thursday. “Man, #bitcoin, technically, is really on the ropes here.”

Dow’s perspective on bitcoin is interesting, considering that he is relatively agnostic on its long-term fundamental value as an asset and admittedly knows very “little” about it beyond the fact that it is “highly tradeable.”

As he tweeted earlier this month:

I’ve yet to hear a positive, credible use case for #bitcoin. Plus, I see a lot of delusional arguments & scammy promotion. However, truth is I know v little about it. What I do know is it has been highly tradeable based on patterns, and I suspect it will continue to be.

According to Dow, yesterday’s pullback brought bitcoin dangerously close to approaching a level at which even bullish traders should “GTFO.”

On Coinbase, for instance, the bitcoin price slipped as low as $3,560, just $10 above Dow’s escape hatch, though it quickly scrambled back above $3,600 to give traders a bit of breathing room. If that support line cannot hold, Dow warned that the market could see another sharp drop as it continues to frantically search for a bottom.

Thursday Drop was ‘Insignificant’: Mati Greenspan

However, other technical analysts have taken a different reading from the charts.

Writing in daily market commentary made available to CCN, eToro Senior Market Analyst Mati Greenspan — an admitted cryptocurrency bull — said that the movement was “actually insignificant” since bitcoin stayed within the range at which it has been trading since mid-November.

“The total movement of 12% from peak to trough was actually insignificant. All we’re seeing is a movement from the top to the bottom of the range,” Greenspan wrote. “As we’ve been discussing since mid-November, the current range is from $3,000 to $5,000 (dotted blue lines). It seems now, that bitcoin has opened a new mini-range within that from [$3,550] to approximately $4,200 (yellow lines).”

bitcoin price technical analysis
Mati Greenspan of eToro said that bitcoin’s Thursday drop did not change the asset’s technical outlook.

Though the movements likely caught many investors off-guard, Greenspan alleged that one shouldn’t overstate their importance.

Movements within a range can sometimes be sudden like we saw yesterday, but unless there’s a breakout of the key levels there really isn’t much to write home about.

In any case, the bitcoin price recovered a small portion of its Thursday losses on Friday, climbing to an aggregated level of $3,701 as of the time of writing. The overall cryptocurrency market, meanwhile, carried a valuation of $123.6 billion.

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Crypto Will Recover Far From 2018 Bear Market


Vinny Lingham, a general partner at Multicoin Capital and the CEO of Civic, believes the crypto market won’t recover any time soon.

He said:

The crypto market will rise again, but most likely only when the pain of the recent fall becomes a distant memory. Don’t underestimate the power of psychology in free markets.

Why Crypto Could Take a Long Time to Recover

bitcoin price ethereum ripple xrp
Top cryptocurrency assets including bitcoin (blue), ethereum (red), and ripple (orange) have taken steep losses over the past several days.

In 2017, the crypto market saw one of the most intense bull runs in its decade-long history fueled by the sudden emergence of retail traders and individual investors in regions like Japan and South Korea.

At one point, the demand for crypto in South Korea surged to a point in which the premium of the Bitcoin price achieved 20 to 30 percent. When Bitcoin was trading at an all-time high at $19,500 in the U.S. market, it was trading at over $23,000 in South Korea.

At the time, investors of all ages from teenagers to middle-aged employees invested heavily in the cryptocurrency market. Many investors saw their neighbors getting rich off of crypto and could not resist.

Teenagers utilized their parents’ bank accounts without authorization to purchase crypto and many individuals in their 40s that felt stuck in their jobs that pay less than $30,000 per year — the GDP per capita in South Korea is $29,742 — invested in crypto, seeing a glimpse of hope.

Nathaniel Popper, a journalist at The New York Times, reported that Kim Hyon-jeong, a 45-year-old teacher and a single mother, invested $90,000 into cryptocurrencies in the fall of 2017, $25,000 from a loan.

South Korea bitcoin cryptocurrency
The crypto crash has been hard on investors in South Korea.

In South Korea, especially in the outskirts of Seoul, teachers are paid on average about $3,000 a month, and with the irrationally high rent costs at the capital, the majority of teachers and government employees are left with less than $1,500 to save on a monthly basis.

As crypto prices plunged, Kim lost most of her money, which may take well over 10 years to recover considering the interest on the bank loan she acquired.

“I thought that cryptocurrencies would be the one and only breakthrough for ordinary hardworking people like us. I thought my family and I could escape hardship and live more comfortably, but it turned out to be the other way around,” she said.

Even now, after the fourth largest bear market in the last 10 years, cryptocurrencies are recognized as a sign of hope for millennials that have given up on the idea of obtaining a stable job, earning enough money to purchase a house in Seoul, and getting married due to the declining economy of South Korea.

Regardless of how millennials perceive cryptocurrencies in markets like Japan and South Korea, it could take a long time for retail traders to psychologically recover from the three-month period from November to January of 2018 when prices spiked by well over 200 percent and plunged to extremely low levels.

How Long?

On average, it has taken the crypto market 62 weeks to recover from major corrections, approximately a year and three months.

But, because of the mainstream media coverage it received and the exposure it gained, crypto could certainly take longer than a year and a quarter to fully recover.

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Bullish Correction Possible if Price Holds Above $3,550


Bitcoin Price — Quick Take:

  • The bitcoin price dropped more than 8 percent on a 24-hour adjusted timeframe.
  • The cryptocurrency is attempting a pullback from a historically strong support area above $3,550.
  • Further breakdown action could lead to a double bottom scenario.

The bitcoin price on Thursday plunged more than 8 percent across the Asian and European trading session, according to aggregated market data at CoinMarketCap.com.

The BTC/USD pair is trading at $3,635 on Coinbase at press time, up 2.7 percent from its session low at $3,556. It formed an inverse relationship with the US dollar, which appeared stronger owing to favorable macroeconomic fundamentals. The US Dollar Index, which measures the US dollar with six leading global fiat currencies, rose by 0.34 percent to 95.11 after dropping to a three-month low.

Bitcoin Price Technical Indicators

BITCOIN 4H CHART | SOURCE: COINBASE, TRADINGVIEW.COM

The bitcoin price has broken below its bearish pennant formation. The pennant’s dotted blue trendline represented as (B) indicates the failed support, while the upper trendline (A) is still looking strong as the session resistance.

There are now two possible price actions left for bitcoin from here: either it could attempt a pullback or could further extend its downtrend. Let’s discuss the first scenario first.

Pullback Scenario

In our opinion, bitcoin is trading inside a false breakout area. There are six separate instances whereby this area had proven to be decent support and resistance (depending on the direction of the trend). The small square boxes in blue indicate how bitcoin price has tested the area between $3,556 and $3,652 before. During a majority of the sessions, traders have treated the range as a signal to purchase.

The most recent purchasing action can be seen in squares (5) and (6). The price action between Dec. 24 and Dec. 27 also reflects a similar trading sentiment.

Therefore, just because bitcoin has broken below (B) does not mean that it will extend its bearish momentum. The cryptocurrency might see a throwback to push the price inside a medium-term sideways consolidation area defined by $4,000 as resistance and $3,652 as support.

Breakdown Scenario

An extended breakdown action could lead bitcoin near its temporary bottom area above $3,110, forming a double bottom. Earlier, analysts have predicted that bitcoin will break below the bottom area to establish fresh lows towards $2,500. From the technical perspective, a double bottom scenario has more likelihood to reverse a trend than to extend it. Generally, the longer duration between the two bottoms would ensure more probability of a bounce back.

Bitcoin Price Intraday Targets

BITCOIN 4H CHART | SOURCE: COINBASE, TRADINGVIEW.COM

The selling action has modified our intraday targets per the new range, which is defined by $3,555 as our interim support and $3,686 as our interim resistance.

We will begin the day by opening a short order towards the support while maintaining a stop loss position 1-pip above the entry position. On a bounce back from or ahead of support, we will open a long position towards $3,686 while maintaining a stop just 1-pip below the entry point.

In the event of a breakdown, such that bitcoin breaks below the interim support level, we will open a short order towards $3,369. A stop-loss at $3,565 would minimize our risks in case the price action reverses. Similarly, a break above $3,686 would have us enter a long position towards $3,817, our upside target. A stop-loss order at $3,676, meanwhile, will protect us from potential interim bias switching.

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