We knew it was coming. Even though, it still is disconcerting at best when you see a drop like this.
So what is the reason for it?
China? Hong Kong? Bitconnect?
Honestly, its probably all of the above plus there are now some pretty sophisticated whales in the game now. I must digress to my earlier post about how I see patterns emerging that SMACK of hedge fund manipulations.
Look at the spikes of volume on each pullback. You can see that they are very close to the same exact volume. This is a front running move by a whale, or group of whales. You can see that even before the market actually capitulated to these guys they were sitting on the bid, they were selling the same amount into the rally. They accomplished 2 things by doing that.
First they discovered how much selling they need to do in order to stop a rally. Second they discovered (or are still discovering) the lowest price they can BUY BTC for. I would look for this selling to continue until the market stops these folks from doing this - or the market capitulates and we have ANOTHER leg down.
On the day chart we have roughly 2 legs down so far. If the whales decide to do the full 'Elliot Wave" thing to us we have a LOT more downside to go.....3 more legs, with the next two being WORSE than the first....we are talking a possible 100 percent retracement to $900.00
I do believe - that would nicely define BLOOD IN THE STREETS.
You can see on the day chart what I am talking about. I just drew this Fib retracement of the entire move from $900 and we are looking at a test of $8000 almost definitely. That would be a 62% correction - pretty hefty. I have seen worse. But if we lose, like $7800 - we are in freefall to $5100 for BTC.
Personally, I am concerned but not in a frenzy over it. I have seen these sorts of things happen many times before. I never put too much capital into anything in this space anyway, so I am merely taking zeros off of my percentage GAINS....ie I have lost nothing....YET.
If you are wise you will SIT TIGHT like I am and wait for the bottom to completely form.....
Then I will dip a toe of new capital in. Calling tops and bottoms is a dangerous game. I will not go all in when I THINK the bottom is in. Remember, I am always early. Only after my first buy and I am comfortable that the bottom is actually in, will I get more aggressive. Extreme caution, patience and self control is on order in times like these.