Bitcoin And Omicron: Is Another Black Swan Brewing?
December 02 2021 - 5:12PM
NEWSBTC
Back in March of 2020, those taking position ahead of the Bitcoin
halving were blindsided by the Black Thursday market selloff,
driven by panic at the onset of the COVID pandemic and subsequent
lockdowns. With the new Omicron strain making headlines, and
lockdowns once again considered, could the cryptocurrency market be
facing another dangerous macro storm and catastrophic collapse?
Omicron & The Return Of The Black Swan Trend Line According to
Wikipedia, a black swan is “an event that comes as a surprise, has
a major effect, and is often inappropriately rationalized after the
fact with the benefit of hindsight.” Black Thursday in March 2020
classifies perfectly as such. COVID came, the market panicked, and
Bitcoin collapsed back to $3,800 at the low. It turned out to be a
huge overreaction. Related Reading | Want To Learn Technical
Analysis? Read The NewsBTC Trading Course Despite the “surprise”
factor of the event and the fact no one saw COVID coming, technical
analysis proves that these black swan events can be predicted to a
point. But what if two black swan events were to happen from
touching the same trend line. Would these really be considered
black swan events? That’s exactly what’s at risk, given the recent
Omicron strain news and related panic, and the fact that Bitcoin
price is indeed up against the very trend line that was used to
predict Black Thursday’s eventual target to the dollar. Could
another black swan arrive with this trend line? | Source:
BTCUSD on TradingView.com Why Another Bitcoin Black Thursday Is
Unlikely The chart above shows that Bitcoin price was rejected from
the same trend line that prompted the COVID correction. The move
was so sharp and intense, a polar opposite rally resulted that took
the cryptocurrency to more than $65,000 per coin. Bitcoin selling
off just as severely wouldn’t necessarily be a bad thing, as the
bounce from such an event has shown. But despite the dangerous
macro landscape and the stock market sinking, the conditions for
the top cryptocurrency are very different this time around. The
conditions were very different then versus now | Source: BTCUSD on
TradingView.com For one, the arrows depict two rejections from
former resistance in 2019, with the second (marked in red) failing
to break out of the Ichimoku cloud. That resistance level dated all
the way back to the very beginning of the bear market, which is why
the Black Thursday rejection was particularly strong. Meanwhile,
the current price action more so appears to demonstrate a
resistance level being flipped as support. The blue path outlines
an expected Elliott Wave motive wave, with three impulses up and
two corrective waves. Per Elliott Wave Theory, wave 1 shows there
still life left in an asset, but market participants are reluctant
to believe the bull market has begun. Related Reading | Finding
Fibonacci: Is Bitcoin Beginning A “Golden” Recovery? Because of the
remaining bearish sentiment, wave 2 wipes out most of the progress
of wave 1, before wave 3 begins. With lows of wave 1 retested at
the climax of wave 2, market participants are more confident in a
blossoming bull trend, which is why wave 3 tends to be the longest
and strongest. EWT refers to this as a wave “extension.” Wave 4
cannot enter into the path of wave 1 and tend to move sideways.
This suggests that it is unlikely to see another sharp correction
like what happened on Black Thursday in 2020. Whenever wave 4
officially ends, and whether it has or not is still up for debate,
targets of $100,000 per coin remain likely for the peak of wave 5.
This is the chart I have been following for months now. Until that
wedge breaks down, I cannot be bearish on #Bitcoin. The bull market
is still on. But has wave 5 begun or not?
pic.twitter.com/m04xxz8Kax — Tony "The Bull" Spilotro
(@tonyspilotroBTC) December 2, 2021 Follow @TonySpilotroBTC on
Twitter or join the TonyTradesBTC Telegram for exclusive daily
market insights and technical analysis education. Please note:
Content is educational and should not be considered
investment advice. Featured image from iStockPhoto, Charts from
TradingView.com
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