Edward Lorenz’s Chaos Theory and the Butterfly Effect has been once again demonstrated. Predicting prices of volatile assets especially in an emerging field as crypto is but daunting.
It is true that the rise to last year’s highs did pump participants that the fall came unexpectedly. Fans, pundits, trolls and crypto experts were side-stepped and their predictions were horribly wrong.
The truth is, the butterflies are having a field day establishing with great accuracy that you never really know what the future holds. Add this to the evolution, regulatory involvement and the global nature of crypto, and the pressure to be right is insurmountable.
In a tweet, the firm said that the spot price of BTC has made it the year’s best buying opportunities. They may be right or wrong. But whether Bitcoin is finding support and bottoming up depends on how it reacts at key resistance and support levels.
Trend and Candlestick Formation
From a top down approach, the path of least resistance is crystal. Sellers are in control and after crashing below $6,000 and $4,500 in a bear breakout pattern, conservative as well as long term traders must see strong movements above these levels before committing.
However, at spot prices, BTC/USD is range bound between $3,200 (Dec 15 floors) and highs of Dec 8 at $3,700—800. Unless there are gains above $3,400, BTC could drop to $3,000 or lower.
Apart from the ecstatic volumes of Dec 6-7, a standout in recent days has to be the bar of 8th December. While it did reject lower lows complete with strong volumes—17k versus 8k average, BTC/USD prices are still moving within its high low.
As it is, losses below $3,200 will invalidate Dec 8 bulls while gains above $3,400 shall cement bullish proposals allowing first wave of buyers to load up aiming at $3,700.
Ideally, if there is price expansion today with volumes exceeding Dec 16, 0300 HRs volumes—5k, then buyers may retest $3,700-800 by the end of the week.