{"id":9700,"date":"2022-01-08T05:43:39","date_gmt":"2022-01-08T10:43:39","guid":{"rendered":"https:\/\/morpheustrading.com\/blog\/?p=9700"},"modified":"2022-04-06T15:03:35","modified_gmt":"2022-04-06T19:03:35","slug":"btc-selloff-2022","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/btc-selloff-2022\/","title":{"rendered":"How Low Will Bitcoin Go? What&#8217;s Next for $BTC?"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/BTC-bottom.jpeg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/BTC-bottom.jpeg\" alt=\"\" width=\"757\" height=\"505\" title=\"\"><\/a><\/figure><\/div>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/btc-selloff-2022\/#Bitcoin_sold_off_sharply_this_week_to_its_lowest_levels_of_the_past_four_months_Is_the_BTC_bull_market_over_Heres_our_simple_analysis_and_insight_on_that_question\" >Bitcoin sold off sharply this week to its lowest levels of the past four months. Is the $BTC bull market over? Here&#8217;s our simple analysis and insight on that question.<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/btc-selloff-2022\/#Bitcoin_New_Bear_Market_or_Bull_Market_Correction\" >Bitcoin: New Bear Market or Bull Market Correction?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/btc-selloff-2022\/#Bitcoin_June_2019_%E2%80%93_March_2020\" >Bitcoin: June 2019 &#8211; March 2020<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/morpheustrading.com\/blog\/btc-selloff-2022\/#73_decline_from_the_highs\" >73% decline from the highs<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/morpheustrading.com\/blog\/btc-selloff-2022\/#Bitcoin_April_2021_%E2%80%93_June_2021\" >Bitcoin: April 2021 &#8211; June 2021<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/morpheustrading.com\/blog\/btc-selloff-2022\/#55_decline_from_the_highs\" >55% decline from the highs<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/morpheustrading.com\/blog\/btc-selloff-2022\/#Crypto_Trading_Plan_What_Next\" >Crypto Trading Plan: What Next?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/morpheustrading.com\/blog\/btc-selloff-2022\/#Absolute_Top_Priority_Capital_Preservation\" >Absolute Top Priority: Capital Preservation<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bitcoin_sold_off_sharply_this_week_to_its_lowest_levels_of_the_past_four_months_Is_the_BTC_bull_market_over_Heres_our_simple_analysis_and_insight_on_that_question\"><\/span>Bitcoin sold off sharply this week to its lowest levels of the past four months. Is the $BTC bull market over? Here&#8217;s our simple analysis and insight on that question.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>After a month of choppy, range-bound price action, Bitcoin ($BTC)\u00a0finally\u00a0broke down below support of the 45,500 level this week.<\/p>\n\n\n\n<p>Notably, the Bitcoin sell-off on January 7 caused approx.<strong>\u00a0$450 million in leveraged futures trades to be liquidated\u00a0<\/strong>within a 4-hour period.<\/p>\n\n\n\n<p>Liquidations have a cascading effect that often exacerbates the selling pressure.<\/p>\n\n\n\n<p>Massive liquidation of over-leveraged futures traders can be positive for the market and help to form a significant bottom (and new participants can do it all over again).<\/p>\n\n\n\n<p><em>But is this the end of the Bitcoin bull market?<\/em><\/p>\n\n\n\n<p>Let&#8217;s look at a few simple charts that may provide context to help answer that question.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bitcoin_New_Bear_Market_or_Bull_Market_Correction\"><\/span>Bitcoin: New Bear Market or Bull Market Correction?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Bitcoin is currently <strong>39% below its all-time high\u00a0<\/strong>of 69,000, which may seem like a steep enough retracement to send $BTC into a multi-year bear market (as would likely be the case with stocks).<\/p>\n\n\n\n<p>However, larger than &#8220;normal&#8221; corrections in the bearish declines coincide with larger than &#8220;normal&#8221; gains that can easily be achieved in the bull runs&#8211;<em>remember that it&#8217;s all relative!<\/em><\/p>\n\n\n\n<p>With $BTC trending lower with that 39% decline over the past two months, it&#8217;s easy to become discouraged and lose focus of the &#8220;big picture&#8221; trend.<\/p>\n\n\n\n<p>The two charts below of &#8220;bear markets&#8221; over the past three years may help put the current correction in perspective.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bitcoin_June_2019_%E2%80%93_March_2020\"><\/span>Bitcoin: June 2019 &#8211; March 2020<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"73_decline_from_the_highs\"><\/span>73% decline from the highs<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/BTC1-010821.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/BTC1-010821.png\" alt=\"\" width=\"759\" height=\"455\" title=\"\"><\/a><figcaption><em>Press image to view full-sized chart<\/em><\/figcaption><\/figure><\/div>\n\n\n\n<ul class=\"wp-block-list\"><li>Bitcoin peaked around 14,000 in June of 2019<\/li><li>$BTC then plunged a whopping 73% to a low of 3,800 by its March 2020 low. <\/li><li>Bitcoin reversed and broke out above the June 2019 high of 14,000 by November of the same year.\u00a0<\/li><li><strong>$BTC completely recovered from a 73% price decline in just 8 months.<\/strong><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bitcoin_April_2021_%E2%80%93_June_2021\"><\/span>Bitcoin: April 2021 &#8211; June 2021<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"55_decline_from_the_highs\"><\/span>55% decline from the highs<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/BTC2-010821.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/BTC2-010821.png\" alt=\"\" width=\"759\" height=\"455\" title=\"\"><\/a><figcaption><em>Press image to view full-sized chart<\/em><\/figcaption><\/figure><\/div>\n\n\n\n<ul class=\"wp-block-list\"><li>Bitcoin peaked near 65,000 in April of 2021.<\/li><li>$BTC quickly tumbled 55% to a low around 29,000 by June of 2021. <\/li><li>This time, the bulls returned after only a 2-month correction. <\/li><li>$BTC was back to a new all-time high by November of 2021.<strong>\u00a0<\/strong><\/li><li><strong>The Bitcoin recovery of a 55% retracement took just 5 months.<\/strong><\/li><\/ul>\n\n\n\n<p>Fast forwarding to the present&#8230;$BTC has now retraced 39% from its all-time high of 69,000 (Nov. 2021).\u00a0<\/p>\n\n\n\n<p>The correction is now two months old&#8211;which just happens to be the length of the April to June 2021 retracement.&nbsp;<\/p>\n\n\n\n<p>Now that the 46,000 support level has convincingly been broken,<strong>\u00a0<\/strong>short-term bearish momentum could easily carry $BTC down to the 40,000 area:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/BTC3-010821.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/BTC3-010821.png\" alt=\"\" width=\"759\" height=\"455\" title=\"\"><\/a><figcaption><em>Press image to view full-sized chart<\/em><\/figcaption><\/figure><\/div>\n\n\n\n<p>Since the 40,000 area is a major area of price support, further decline to\u00a0this level could lead to a substantial rally in Bitcoin and the altcoin market.<\/p>\n\n\n\n<p><strong>However, we are NOT implying the ultimate pullback lows have already been set.<\/strong><\/p>\n\n\n\n<p>Nor are we suggesting that Bitcoin will be at another new high within the next several months.<\/p>\n\n\n\n<p>Nevertheless,<em> past Bitcoin cycles and trends have a history of repeating.<\/em><\/p>\n\n\n\n<p>Bullish reversals usually start at the maximum level of fear, and around the same time market participants finally give up and &#8220;throw in the towel.&#8221;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Crypto_Trading_Plan_What_Next\"><\/span>Crypto Trading Plan: What Next?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Regardless of whether or not $BTC finds a bottom near current levels, we will continue to selectively focus on <a href=\"https:\/\/morpheustrading.com\/services\/crypto-picks\" target=\"_blank\" rel=\"noreferrer noopener\">swing trading crypto<\/a> altcoins with top relative strength in the market.<\/p>\n\n\n\n<p>Although a vast majority of cryptocurrencies still follow the same direction as Bitcoin, we have started noticing a new trend on <em>some <\/em>days.<\/p>\n\n\n\n<p>A small number of crypto altcoins with high relative strength have quickly recovered from the sell-off and forged their own path higher&#8211;even when $BTC remained weak.<\/p>\n\n\n\n<p>For example, Frax Share ($FXS), which we are currently holding with a +14% gain in the <em><a href=\"https:\/\/morpheustrading.com\/services\/crypto-picks\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Morpheus Crypto<\/strong><\/a><\/em> portfolio, ignored the Bitcoin selloff and is currently consolidating at its all-time high.<\/p>\n\n\n\n<p>Altcoins with high relative strength are the first to rally when $BTC eventually bounces, and the last to fall if further market weakness continues.<\/p>\n\n\n\n<p>With a vast majority of altcoins plunging lower this week, we are currently scanning hundreds of charts to find the top standouts for subscribers.<\/p>\n\n\n\n<p>As we recently discussed in the <em><a href=\"https:\/\/morpheustrading.com\/services\/crypto-picks\" target=\"_blank\" rel=\"noreferrer noopener\">Crypto Trading Room<\/a><\/em>, we believe we will <em>gradually <\/em>continue to see further separation of leading altcoins away from the trend of$BTC.<\/p>\n\n\n\n<p>Bitcoin remains a <em>fantastic<\/em> store of value, but the crypto market is maturing and there are now a few important, revolutionary altcoins that are building Web 3.0.<\/p>\n\n\n\n<p>As such, the focus of Bitcoin itself may slowly start to have less bearing on the overall crypto market direction.<\/p>\n\n\n\n<p>Still, $BTC direction will always have <em>some<\/em> impact because of the altcoins that are paired with Bitcoin.<\/p>\n\n\n\n<p>Even after this sell-off, the\u00a0<a target=\"_blank\" href=\"https:\/\/learn.bybit.com\/investing\/what-is-bitcoin-dominance\/\" rel=\"noreferrer noopener\">Bitcoin Dominance Index ($BTC.D)<\/a>\u00a0remains near its lows at 40.\u00a0<\/p>\n\n\n\n<p>A convincing break of <strong>$BTC.D below that major support level of 40 would be bullish<\/strong> for the altcoin market in general.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Absolute_Top_Priority_Capital_Preservation\"><\/span>Absolute Top Priority: Capital Preservation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Traditional &#8220;buy and hold&#8221; crypto investors who don&#8217;t use stop losses may have suffered substantial drawdowns yesterday.<\/p>\n\n\n\n<p>However, in the <strong><em><a href=\"https:\/\/morpheustrading.com\/services\/crypto-picks\" target=\"_blank\" rel=\"noreferrer noopener\">Morpheus Crypto<\/a><\/em><\/strong> service, we provide members with an exact, fixed stop price with a new trade alert at the time of every new crypto swing trade entry.<\/p>\n\n\n\n<p><strong>This is where the Morpheus <a href=\"https:\/\/morpheustrading.com\/services\/crypto-picks\" target=\"_blank\" rel=\"noreferrer noopener\">crypto swing trading<\/a> system really pays off- we keep you out of trouble!<\/strong><\/p>\n\n\n\n<p>The\u00a0net loss from stopping out of several swing trades can be quickly recovered by just a few winning trades\u00a0with highly positive risk-reward ratios.\u00a0<\/p>\n\n\n\n<p>Here at Morpheus, our\u00a0<strong><em>absolute, top priority\u00a0<\/em>for members is to always live to fight another day<\/strong>&#8211;which will always be the case as long as stops are utilized.<\/p>\n\n\n\n<p>Making crypto trading profits is secondary because<strong>\u00a0<\/strong>profits ultimately do not matter IF you do not even have a system to protect those profit<strong>s\u00a0<\/strong>when the going (inevitably) gets tough within the scope of normal market cycles.<\/p>\n\n\n\n<p>Leave the 10x leveraged trading to the gamblers. We prefer to rely on math&#8211;average win greater than average loss, positive win\/loss ratio, etc.<\/p>\n\n\n\n<p>As for the\u00a0<em>short-term<\/em>, our number one focus right now is CAPITAL PRESERVATION (holding onto previous profits).\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin sold off sharply this week to its lowest levels of the past four months. Is the $BTC bull market over? Here&#8217;s our simple analysis and insight on that question. After a month of choppy, range-bound price action, Bitcoin ($BTC)\u00a0finally\u00a0broke down below support of the 45,500 level this week. Notably, the Bitcoin sell-off on January [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[772],"tags":[],"class_list":["post-9700","post","type-post","status-publish","format-standard","hentry","category-crypto-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/9700","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=9700"}],"version-history":[{"count":4,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/9700\/revisions"}],"predecessor-version":[{"id":9708,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/9700\/revisions\/9708"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=9700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=9700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=9700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}