Bitcoin fell last week, initially recovering a bit before selling off later in the week amid FUD surrounding Elon Musk-inspired Bitcoin mining environmental implications, falling underneath the $50K level and even dipping down below $44K before ultimately closing the candle above $45K. This is a bearish candle and a continuation of the early May selloff, getting us closer to testing a major long-term support level that has yet to be tested: $40K.
(May (May 16, 2021 8:30PM EST)
Short-Term
Bitcoin's continued weakness comes amid 2 main short-term factors:
1) Bitcoin Dominance:
Exuberance among altcoins (particularly new, small-cap cryptos) has reached frothy levels once again, resulting in a sector rotation out of BTC and into altcoins. As you can see in the BTC.D chart below, BTC is now just about at a multi-year low not seen since a couple weeks after BTC peaked in the 2017-2018 crypto blowoff top.
TL;DR? Bitcoin's close to a bottom. As always, BTC should find meaningful support, recover, consolidate, and lead the pack to new highs.
2) Market Sentiment / Media FUD
Instigated by Elon Musk among misinformed others. Bitcoin's environmental impact has been debunked a number of times; this bearish narrative is simply a speed bump on the road to $100K+ BTC.
Long-Term
BTFD. Fundamentals have not changed. Daily and even weekly charts will show 30% corrections; this is standard bull market behavior. Now that another altseason is coming to a close, this sets us up for another Bitcoin leg up to new highs, likely $75K+ or higher. By nearly every measure, we are nowhere near a top; in fact, we are maybe halfway through this bull market. What do you do during bull markets? Buy. The Dip.
Support: $45K, then 61.8% fib at $42.3K, then $40K.
Resistance: $60K.
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