Is it time to be cautious after Bitcoin’s 6-percentage-point drop?

Following a dramatic drop in the value of the cryptocurrency market on Friday, Nicholas Merten examined how bears took control of the BTC price amid fears of a new coronavirus variety wreaking havoc on traditional markets.

The lower time period on the chart appears to be a doomsday scenario, but Nicholas claims that when we zoom out to view the wider picture, it is not as bad.

According to Nicholas, the rapid proliferation of new covid variant cases in South Africa has prompted concern in the overall equities market. For example, the S&P 500, a stock market index of 500 publicly traded domestic companies, is down 2%.

Even though Nicholas believes otherwise, the announcement of Mt Gox’s $9 billion settlement has generated worry in many that an aggressive dump is on the way. He believes they would execute an OTC deal rather than dump on the spot markets, and that some of them will keep it because they are Bitcoin proponents who have been buying since 2011.

Despite his long-term bullishness, Nicholas emphasized that he does not believe Bitcoin would reach $100,000 by the end of the year, citing his tweet. He cautions the general public not to regard respected analysts’ predictions as gospel because no one knows which way the market will move.

He went on to say that two accumulation phases (when the price swings sideways) in February to mid-May and May to mid-July were the main takeaways in the market dynamic in the previous year. According to him, the market’s rebound from July to now is establishing the foundation for another rally.

Nicholas claims that the current range is the same as February to May and that it should be established as support. He adds that it will take a few more weeks of sideways movement before things pick up again.

Nicholas says the bullish cycle is still in play and using Bitcoin’s all-time history charts, the market is following expanding cycles from bottom to high. Bitcoin might reach $200,000, according to the estimate, but only over an extended period of time.

This episode premiered on November 26th, 2021.