Bitcoin tried to recover on Friday, drifting higher above the $51K level before getting rejected by the 38.2% fib, falling back below $50K to close the daily candle around $49K and change. This is a bearish candle in response to yesterday's selloff in which we broke below the 50 Day EMA, so all eyes will be on support at the 50% fib around $47K.
(May 14, 2021 8:30PM EST)
Short-Term:
Bitcoin broke below the 50 Day EMA for the second time in about a month which is not a great look, which leads one to believe if we're heading lower , possibly to the 200 Day EMA. This is possible but not my primary view. By all measures, we are in a well-defined uptrend and dips like this historically do not last long. This is evidenced by the rampant buying under $50k to catch the dip. There has a bearish turn in sentiment lately a la Elon Musk, IRS, etc. These things are expected and recurring, but generally short-term noise and nothing more. How many 20-30% corrections have we experienced in this bull market so far? If you haven't learned to BTFD during uptrends, you have a lot to learn.
I am a buyer on dips and continue to do so as BTC is likely near a local bottom and should make a major move higher over the next few weeks. Why? Look at the BTC Dominance chart below.
As you can see in the circles below, we're now roughly at the 2017-2018 bull market peak for altcoins, just a few weeks after Bitcoin put in its previous ATH at $20K. This is a major support level for BTC.D, indicating we are experiencing the peak or conclusion of another micro altseason. This is evidenced by the rampant retail trading and overleveraged positions in baseless small-cap coins like Doge, Shiba, etc. This gives us confidence that BTC is close to bottoming out if not already, and is entering another consolidation phase before it bounces on the BTC.D chart as capital rotates from altcoins back into BTC.
Support: 50% fibonacci retracement around $47K, then $45K.
Resistance: $60K, then $70K, $80K, then $100K.
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