Transcription
Hey guys, Allesio. Hope you're well.
So, in this video, we're going to take a look at a chart of Bitcoin and after a significant and heavy drop in the price of Bitcoin. We're going to ask the question, is Bitcoin getting closer to a potential bottom and what could likely happen in the next several weeks. All right, guys, join me.
All right, guys. Welcome back. Speaking to you today from Forest Mir in England. I just came here today for a really beautiful spot here, uh, and just going for a walk.
All right, guys. Before we take a look at the chart of Bitcoin, there's something important I want to mention here first. Some of you probably saying to me right now, hey Allesio, back a few months ago in December, you were quite skeptical that we're in a bare market on Bitcoin. What are you saying now? So, I want to address this point.
Uh, firstly, as I'm sure most of you know, look, there's a lot of people out there making videos on YouTube. And as I'm sure you know, a lot of these guys on YouTube just put out a video simply to get clicks. And then you have another bunch of people out there who make videos just by reacting to what's happening to the price. You know, they say, "Oh my goodness, price is crashing. It's the end of the world." And things like that.
Now, if you've been watching my videos for some time, then you probably know that when I put out a video, I have to believe in what I'm saying. So, I have to have confidence that what I'm saying is correct. So, that is why I'm often very cautious about what I say because I like to wait for evidence and proof about what's happening on the price action. That is why in December, I said, look, I'm waiting until the price of Bitcoin confirms that we are indeed in a bare market.
Now, how does the price of Bitcoin confirm that? Quite simply by waiting for a rally, a bounce back towards the weekly 21 EMA and then getting rejected from that level. That's what I said in December. And of course, that is what Bitcoin did. In January, Bitcoin rallied back towards the 21 weekly moving average, as you can see right there, towards the 96K, 97K range and almost made contact with the 21 weekly moving average and then got deflected, got rejected from that level. And that is why I put out this warning back in January when I was in Istanbul. Here's a clip.
That recent price drop on the price of Bitcoin seems to indicate that Bitcoin is now getting rejected from the 21 weekly moving average or just close to that level. So guys, as it stands right now as I'm making this video, it's not good news for Bitcoin at the moment. The odds have increased towards the bearish side. In other words, as long as Bitcoin stays below the January highs and below the 21 weekly, for now sellers or bears have control. Uh, because at the moment, given that red bar, given the recent price drop, at the moment the probabilities are increasing that Bitcoin could potentially now move to new lows and potentially below the 80K level and to the 70s.
All right guys, so as you heard when I was in Istanbul, you probably saw my video and I issued a warning, a strong warning that because Bitcoin had got rejected from the weekly 21 EMA, which was a strong warning sign. And by the way, that warning in January came just in time before the big drop occurred below 80K. And by the way, here's what I said in the member video some weeks ago back in January.
At the moment here, the risk appears to be higher for a potential breakdown. And as mentioned, we have to be extra cautious because Bitcoin seems to be showing weakness. Again, as long as we stay below the January highs and below 93, 94K, the probability is we're dealing with a wave five, a wave five decline below 80K. So there is potential here that if Bitcoin overshoots then it could potentially overshoot to firstly 66,550 and potentially even lower to near 63K.
All right guys, as you heard in the member videos, I was warning that Bitcoin could likely drop in a wave five towards the downside targets to 70K and then potentially even lower to 63K and 60K, which is essentially what we've seen so far. By the way, as some of you probably know, 63,000 is approximately the 50% level from the all-time highs of Bitcoin. So, for example, if you take the all-time highs of Bitcoin back in October near 126,296 divided by two, then what you get approximately is 63,000, which is the level we dropped down to. And that is important because in previous major drops, crashes, and corrections in Bitcoin in 2022 and in 2018, we've often seen a drop down to the 50% level. In other words, the 50% of the all-time highs of the price of Bitcoin. And that's quite interesting because typically the price of Bitcoin finds a floor or some kind of a bottom near the 50% level. Not always. Sometimes it goes below that level. But nonetheless, usually when price of Bitcoin drops by at least 50% from its all-time highs, it typically finds a floor or a bottom in the next several weeks or at least it means price of Bitcoin could be getting near a potential bottom.
And by the way, guys, before we continue, I'm not trying to say I got everything perfectly correct in my analysis. No, I did not. You know, when it comes to the markets and chart analysis, you know, we're all students of the market. We're always learning.
Okay, now going back to the chart of Bitcoin, this drop in the price of Bitcoin has been pretty severe and it's been very sharp. It's often called a waterfall decline. And guess what, guys? This major drop that occurred, uh, recently. What's happened is that the RSI has now become extremely oversold. So, in the past when Bitcoin has become so extremely oversold as it has occurred recently, typically the price of Bitcoin is getting near capitulation or a bottom. In fact, what recently happened as well is we can see extreme acceleration on the price of Bitcoin. That means the price of Bitcoin is getting near capitulation. In other words, a major low or a bottom.
Now, don't get me wrong here. I'm not saying the price of Bitcoin cannot go lower. It could, but I think even if the price of Bitcoin were to drop slightly lower, I still think we're getting very close to a potential bottom and capitulation because the price of Bitcoin essentially is extremely overstretched. If you think, for example, of an elastic band, now take an elastic band and stretch it, okay? And the more that elastic band becomes stretched or overstretched, the more likely it's going to bounce back. So right now, the price of Bitcoin is extremely overstretched. It's moved too far too fast to the downside, which means the probability of some kind of a bounce back, some kind of a strong rally is now increasing.
By the way, guys, we're not far away from the 200 weekly moving average, which is a very important key support level for the price of Bitcoin. In the past, usually the price of Bitcoin finds a floor or some kind of support. In other words, a level where it potentially rebounds from the 200 weekly moving average.
So guys, in my view, the price of Bitcoin has become extremely oversold. And also, as I mentioned earlier, we're support levels where Bitcoin has dropped to a 50% level near 63K and also some key moving averages. So, what I'm expecting is a very strong bounce and rally in the next several weeks and months on the price of Bitcoin.
Other than the reasons just given you based on the oversold conditions and overstretched conditions, we've had now five waves to the downside. If you go from the all-time highs of Bitcoin back in October to the lows we just reached, we can count five waves to the downside. And that means this, guys, after five waves to the downside, then we typically see a strong correction, an ABC correction for example, and that correction or bounce after the five-wave drop is usually very strong, very powerful. So based on the probabilities, what I'm seeing on the chart of Bitcoin after the five-wave drop, I think it's quite probable we're going to see a very strong powerful bounce on the price of Bitcoin in the next several weeks.
And by the way, guys, that bounce and rally in the price of Bitcoin is something that a lot of people out there are not expecting. You see, guys, a lot of people right now in the Bitcoin community are very pessimistic. The sentiment on Bitcoin right now is extremely negative and pessimistic. There's a lot of people out there right now who probably given up and are very scared about the price of Bitcoin.
So guys, in my view, even if price of Bitcoin makes a lower low, again, I'm not trying to say to you that Bitcoin has definitely bottomed right now, but even if Bitcoin has not bottomed and makes a slight lower low, I still think we're getting very close to a bottoming formation and capitulation in the price of Bitcoin. So, I think we're very close to the conditions we usually see for a strong bounce and a rally on the price of Bitcoin. And that is what I think is quite probable and quite likely in the next several weeks and months.
And by the way, this should come as no surprise because even in bare markets like for example the one we had in 2022, there were very strong powerful rallies and bounces like the one you see here. Uh, again, some people think that in a bare market you cannot have a bounce or a rally. No, you can. So that I think is quite likely for the price of Bitcoin in the next several weeks and months.
And by the way, I'm going to cover the key targets I'm looking for in the member video. So make sure you check that out. And by the way, if you're not a member, go to the link you see right there and join. Thank you very much indeed, guys. If this video has helped, please give it a like and also subscribe for future video updates. Thank you very much indeed. Bye for now.