Over the last week I've seen way too many posts about $10,000 Bitcoin.
Indeed, the market turmoil reached a new peak with the controversial collapse of FTX and the hundreds of smaller players that were under their umbrella, including Blockfi and Alameda (and more).
Even Solana (SOL) wasn't spared and is still struggling to recover from the market fear. FTX was a big platform for Solana-based stablecoins, so naturally, it felt the ripple-effect of the demise of the second-biggest exchange worldwide.
But I'm not going to talk about FTX in this post.
I will opt for an answer to the question I get from every direction right now:
Is Bitcoin Really Going To Drop To $10k?
The short answer: No.
The long answer is more deserving of attention though, so keep going ;)
You see, right now there are several indicators that point toward an uptrend (or even a trend reversal) coming soon.
I'm talking about bigger timeframes, like the monthly chart, so "soon" could be anywhere between one to three months.
Nonetheless, the macro looks good and by all means, it seems we are bottoming out in this bear cycle now.
Here is the monthly chart of Bitcoin with Stochastic RSI and the Rainbow Adaptive RSI clearly sitting in the oversold region and at levels only seen at the bottom of the last bear cycle.
Of course, these indicators don't predict the absolute bottom price, but they're a good reference point for the upcoming move on the upside.
On the other hand, we could drop another $5000 easily and these indicators will still be in the oversold region where they can stay for many months.
Does that mean we can expect Bitcoin to drop all the way down to 10k though? I don't see why would it.
First, we have a very strong support around the $14k region and in the mid-13k as well. I personally see Bitcoin as a very appealing "buy" in the $13k region and I'm not alone in wanting to accumulate in bulk, should it ever go that low.
Then we have the $12k - another good support zone for Bitcoin that has been established in the past. This is also a golden Fibonacci level of support, making it all the more resilient level.
We have of course, the 10k support that was a long struggle back in Apr-May 2020, so I see why people consider it the ultimate bottom.
But...
We shouldn't be too quick to jump to conclusions about the 10k level.
For a start, we're dealing with way more long-term holders in this bear cycle, than we've had in the past. Institutional investors, some of whom are large holders, are not selling at this point. Those who stayed in the market until now are only interested in accumulating more as the price drops.
On top of that, we can refer to past performance as well.
We are currently standing at around -77% correction in this bear cycle.
A possible -80% correction stands in the 13k region.
This is quite achievable and probable even, but I expect a lot of buying appetite around this level. It could be visited only very briefly.
If we consider the possibility of -82% correction, this will take us to the $12k region.
With so many traders calling for the $12k region, we can expect even bigger buyers appetite if we touch this level.
Again, very momentous, if even.
Also probable, we've done this before.
Finally, in order to drop all the way down to $10k region, we have to make greater than -84% correction, which is less probable imo. It is possible, but not very probable - there's a difference.
We've only done this once in the past and the ecosystem today is far more populated and advanced, both user-wise and investor-wise.
In other words, don't count on it.
For reference, we had -84% correction back in 2018
Before that, in the bear cycle of 2014 we even touched -86% but very briefly, less than an hour, then hovered around -84% for 2 days and that was it.
Recovery followed straight after. A drop like that becomes very attractive to long term buyers.
From what we see, our corrections are becoming smaller over time, so it is safe to assume (of course, not an absolute prediction, but a safe assumption) that we could drop by -80% and this will be in line with the gradual rise in investors confidence in Bitcoin. With time we not only have more investors, but they have more experience and like me, have survived two or even three bear cycles, so this has to be taken into account.
Here's another chart to consider: the Bitcoin 2-Year MA Multiplier
Buying Bitcoin when its price goes under the 2 year MA (this is the green line) has historically been the best strategy for long term profit. And we're talking hundreds per cent profit, which is why I am not concerned with the short term.
We are right now in the same zone, where we were back in 2018 and 2015, before a market reversal. Another couple of months and we will be exiting this zone in my opinion.
This is the Bitcoin Logarithmic Growth Curves chart and it's also showing that we've dropped to levels that are only observed during previous market bottoms, we've even broken below our bottom curve and this doesn't occur often at all.
With that said it becomes more and more evident that we are in the process of bottoming out and that if another drop occurs, it will most likely stop by the 14-13k region and will never fill those 12k orders, let alone the 10k dreams.
Markets tend to be unpredictable and do crazy things, so I could be surprised, but also, all those traders calling for 12k... if the market did what you expected, then everyone would be winning and that's not how it works.
In other words, Bitcoin is a very appealing "buy" already at these levels ($16k as I'm writing) and you could try and catch the ultimate bottom, but you might also be left behind. Once a recovery begins, we can quickly jump into the $19k-20k region, leaving only hope for the 18k and no prospect of even $16k again, so don't be greedy, don't try to time the bottom.
I'm no financial advisor, but I think DCA is a healthy strategy to implement already. Up to you how you do it, I am buying in small portions already, keeping some capital for possible lower prices, but also having enough exposure in case we start a recovery sooner than expected.
Hope this helps, if so, show some support by liking and sharing this ;)
Trade carefully, stay profitable.
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