Bitcoin rallied slightly on Wednesday, initially rallying before giving back most of the gains, ultimately closing the daily candle with an inverted hammer. This is not a great look but we could really go either way at this point; my medium-long-term bias is obviously up but it is unclear whether Bitcoin has already bottomed yet or not.
(February 24, 2021 7:30PM EST)
Outlook:
Bitcoin consolidated a bit on Wednesday, rallying a bit before sellers faded the rally to close barely higher. It's reassuring to see a green candle as the buyers stepped in to buy the dip alongside news of Twitter adding another $170 million Bitcoin to its balance sheet. Regardless, Bitcoin's fundamentals have not changed; the demand far exceeds the supply, which is programmatically halving over time, and with the US Federal Reserve planning for more inflation ahead, Bitcoin has the winds in its sails. This is simply a short-term blip that should be bought unless proven otherwise. I have been dollar-cost averaging and will continue to do so, as no one knows exactly where the bottom will be.
One thing is for certain, though; BTFD during a bull market. If you were waiting for a dip, now's your time.
Primary View:
Bitcoin is completing a Wave 2 correction which could have some more downside before it terminates, putting in a local bottom and higher low. Wave 2s are typically at least 61.8% retracements of W1, so we could see our bottom right at $40K which would be a very close support level to what was previously resistance and the local top of the January 2021 correction.
If you compare the January 2021 Bitcoin pullback from $42K to $29K (see above), also a 30% correction, the two seem very similar -- in fact the January correction made a 50% correction, so if that was the case here then Bitcoin would bottom around $44K. Also consider that the January correction also took less than 3 weeks to complete, so we may see this correction run its course through mid-March before starting to consolidate toward a larger W3 higher (W3 of W3?).
Strategy:
Buy the dips. HODL. Stake for passive interest.
Traditional Markets
The 10 Yr Yield rallied to higher highs, breaking the yearly high and rallying to 1.382%. This is unsuspected and somewhat concerning, as this is quite an overextension and puts enormous downward pressure on gold and is helpful for the US dollar.
Support:
38.2% fib around $47.2K.
If Bitcoin falls below that, look for support at:
$45K level
50% fib around $43.8K
$40K.
Resistance:
Immediate-term = roughly $60K.
Buy Bitcoin here.
Earn Crypto here.
