Bitcoin recovered a bit on Tuesday, going back and forth in a nearly $4,000 range to ultimately form a slightly green Doji candle. My initial reaction is if the Bitcoin correction is over already -- not quite. Though Bitcoin appears to have stabilized a bit, corrections are not often one day, but rather a grind lower. 
(January 12, 2020 7:30PM EST)
Bitcoin had a sideways to slightly bullish day on Tuesday, trading between $32,000 and $36,000 and eventually settling the daily candle around $35K. This makes sense as Bitcoin attempts to find some footing following yesterday's massive selloff in which at one point BTC was down almost 30% before recovering to finish down -15%. Today buyers stepped in a bit to guide Bitcoin slightly higher as value hunters come in to buy the dip and institutions continue to DCA, perpetually exceeding the daily supply made available on the open market via mining. The fundamentals haven't changed one iota, Bitcoin simply got a bit overextended and it made a standard and healthy correction. While this is a healthy and expected market reaction, I don't think it's over quite yet.
During bull markets, Bitcoin tends to make ~30% dips, which Bitcoin would have had for a moment but recovered to only print half of that. Now, with selloffs on the monthly, weekly, or even daily charts, selloffs are rarely one-day-only, in other markets as well. Yes, they are faster, especially in bull markets, but that doesn't mean we can't grind lower or sideways for another month. With that being said, I think Bitcoin might drift lower from here as weak hands get shaken out and short-term traders take profit and flip the script for a few weeks. Ultimately, my primary target is $25K where I think there will be undeniable support underneath, and at that point, anyone who isn't already in will probably FOMO in on top of the already-growing demand on a daily basis. Anything below that is an absolute gift and should be bought. In the meantime, I think Bitcoin will drift down to the high $20,000's -- $27K - $29K where it might oscillate a bit, carve out a short range, and digest the recent gains.
Going forward my mantra is to buy on dips, dollar-cost average on a regular basis, and even earn Bitcoin if you can. The path of least resistance is up; don't try to fight it unless you're a degenerate gambler willing to get burned.
You simply can't short or even sell this market when all it does is go up over time. Sure, there are short-term fluctuations, but long-term there's no sense in missing out on this ride. This is truly the trade of the decade: if you're not in Bitcoin, chances are you'll be getting much worse returns elsewhere.
Support: Look for support around $30K (38.2% fib) and then $25K (50% fib). Anything lower than that is a screaming buy, though I'm not even sure we'll see $25K again. For more precise price targets, set staggered buy orders at Fibonacci retracements levels and monitor price action to see what gets filled, and if Bitcoin starts to form a convincing-looking reversal, adjust accordingly (up or down).
Resistance: Look for resistance at $40K. If Bitcoin breaks above $40K, look for $45K, and then $50K. After that, we'll probably move in $10K increments.
About Us:
If you enjoy these posts, please support the channel by "Tipping" this post below, or using either of these referral links below.
