That’s probably what most of you were thinking on Wednesday as you awoke to cryptos plunging across the board.
If you’re like me, you were checking the markets as soon as you woke up.
While Bitcoin was down 30% at the low, altcoins suffered far worse.
VET was down a staggering 68% in one day!
Others like ADA were down 50%.
It was a bad day, and that’s me being optimistic.
Although the market bounced back aggressively following Wednesday’s bloodbath, we’re starting to see weakness creep back in today.
China is threatening to crack down on Bitcoin mining (again), and it seems only a matter of time before we hear from our dear friend Elon.
So, where do we go from here, and what’s the latest on the bull market?
In today’s issue, I discuss the technical damage from Wednesday’s crash, what could happen if the bottom isn’t in, and what it means for the rest of this bull market.
Let’s get it!
Total Crypto Market Cap
The total market cap broke below a significant level this past week.
The $1.85T level is the bottom of an ascending channel that extends from February.
Wednesday closed below it, and the $1.85T area turned to resistance during Thursday’s retest.
Unless the market can get back above this level and quickly, there’s a decent chance the total market cap tests $1T as support.
There’s a confluence of support there per the chart below.
Total Altcoin Market Cap
As expected, the altcoin market cap has a similar structure to the total cap we just discussed.
However, I wanted to cover it separately to illustrate the significance of the technicals.
It starts with the ascending channel below, including its mid-point.
Notice how the mid-point has served as support and resistance for months. It’s also where the market bounced this past week.
Note: A channel’s mid-point is simply the line that runs through the middle of any equidistant channel.
As of now, the mid-point is near $800B.
That’s going to be support. If it fails on a daily closing basis, there’s a good chance we see the market rotate even lower.
One area of interest below $800B is the confluence of support near $470B.
That’s the intersection of the 2020 ascending channel and the previous high from early 2018.
Bitcoin suffered a massive 30% drop on Wednesday before rebounding 40% at Thursday’s high.
However, the technical damage stands.
The $42,000 to $43,000 area was key support on the way down, so it makes sense to see BTCUSDT struggling to climb above that area.
If it can, we could see $47,000.
The more likely scenario, in my opinion, is another push lower.
Whether that takes out the $30,000 low is anyone’s guess.
But given the two total market cap charts I just discussed, a move of that magnitude could send BTCUSDT down to $28,000 or even $25,000.
As always, there are no guarantees, and I’m taking this one day at a time.
I don’t believe the bull market is over.
If anything, what’s happening now is similar to 2013.
During the 2013 bull run, Bitcoin dropped 81% before rallying over 2,000% by the end of the bull market.
While I don’t think we see a 2,000% run at the end of this correction, a significant rally through August/September still seems likely, in my opinion.