Analyzing the Recent Bitcoin Dump - 2 Potential Scenarios

18 thg 8, 2023

Introduction:

Bitcoin experienced a sudden 9% drop from $27,712 to $25,166 in just 9 minutes following the news of China Evergrande's filing for US bankruptcy.
The bankruptcy news came out around 11 pm UK time, and it seems to have had a cascading effect on liquidations, leading to this significant price movement. Two possible scenarios can be derived from the current market situation:

Scenario 1: Bitcoin has reached a new 2-month low of $25,166 and could rebound to new highs, marking the bottom.

Scenario 2 (More Likely): Bitcoin may follow the SP500 and Nasdaq in a possible near market crash, mirroring recent market anxieties.

Fibonacci Retracement Analysis (15min chart):

Utilizing a modified Fibonacci retracement tool, we can further analyze the Bitcoin price movement. By mapping from a high (1) of $28,706 to a low (0) of $25,166, we find the following significant levels:

Stop Loss (1): $28,706
Golden Zone (0.618 & 0.5): $27,298 & $26,877
Potential Entry Point (0.382): $26,463 – Currently being rejected from the golden zone.
Take Profit 1 (0): $25,166 – Sell 40% of the position
Take Profit 2 (-0.382): $23,931 – Sell 30% of the position
Take Profit 3 (-0.618): $23,199 – Sell 20% of the position
Take Profit 4 (-1.618): $20,338 – Unlikely, but sell the remaining 10% of the position in case

Conclusion:

As we navigate the turbulent market landscape, keeping an eye on key Fibonacci levels (and on the news...), and recognizing the potential connection between Bitcoin and broader market indices may provide invaluable insights. While the immediate future remains uncertain, careful planning around these critical points may help traders position themselves for the coming shifts.