Bitcoin Technical Analysis--Buy The F*cking Dip?

cryptochindian(54)

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Based on BTC's historic price action, I believe we have still not hit our reversal bottom. We'll start by looking back to a few cases in particular, starting with the Monday massacre on July 16th. Here we see that price action dipped and tested the 150 EMA before closing above it. After measuring we see that the retrace was nearly a textbook 38.2 retrace from its previous local high. Moving on to the China/Jamie Dimon FUD from September 15th we see a similar situation. Price bounced off the 150 EMA and retraced again nearly perfectly to the 38.2 level.

On both of these occasions we saw an RSI that had hit bottom and was way oversold and due for a bounce. This is interesting to note moving forward as we analyze the historic price action after each bottom bounce.

In the first case we saw price bounce from $1700 all the way to $5000 which was a 300% increase in less than 6 weeks. In the second case we saw a bounce from $3000 all the way to $7900 (260%) before resetting the RSI below the centerline. Now that last reset is interesting because even though price did not bottom out, it did dip below the 50 level before quickly recovering and sky rocketing BTC to its ATH of 19,891 that still stands to this day.

Fast forward to today and we see an RSI that is making its way back down towards the oversold condition. It is currently hovering at 35 which will lead me to my thesis. Based on recent historic trends (which include more rapid adoption than past years), BTC has bottomed out on RSI prior to making a run for a new ATH. While we do see a retrace to 38.2 and below, BTC was not able to break back out and go for another bullish run; my theory is that it requires an RSI bottom in conjunction with that 38.2 retrace.

If this fractal pattern is to hold, we can reasonably assume that BTC has not quite bottom out yet and could bleed down to my initial projection of 8.5k before RSI truly bottoms out. At this point we would bounce and recover full speed ahead to our ATH of 20k and beyond.

With that said, I will be closely monitoring the lower time frames for confirmation of one last big dip before BTC is projected to make its way back up the throne. Steady hands on this one as it could stay bumpy throughout February until we have one final sell off.