Click to watch the video: Master Chen's 1.12 Video: Has the bearish pattern of the market been established? Pay attention to the risk of a deep five-digit drop!

Today in the video, we will discuss the possibility of Bitcoin experiencing a significant drop of $10,000. Of course, the long position I currently hold is still profitable, but I have been engaging in short-term contract trading to hedge risks against spot trading. If Bitcoin does experience a significant drop, where can we find a position to continue going long with a potential 100x return?

First, let's take a look at the daily chart of Bitcoin. It seems that there is a very obvious bearish wedge pattern here. Bitcoin has been in a continuous downward trend for three days, including the listing of the Bitcoin ETF in the United States last night. However, it was unsuccessful, and the price of $48,000 has not stabilized. At this point, we need to be suspicious if this is indeed a bearish wedge pattern.

If this is the case, it is possible that the main force is intentionally creating FOMO in the entire market, or inflating the market and deceiving retail investors. We can also observe the significant trading volume below. Despite the large volume, the price has not managed to surpass $48,000. Later, I will explain the possibility of Bitcoin dropping by $10,000, starting from the $49,000 level.

Let's take a look at Bitcoin's position in October 2023, when it was at a low point. I have previously mentioned the possibility that the institutions were intentionally suppressing the price to deceive retail investors into selling at the low point. It seems that each rebound height is not sufficient, and the low point continues to decrease. It is possible that the main force is intentionally creating traps to make retail investors sell their chips at the low point and then buy them all back. In terms of technical analysis, both bullish and bearish wedge patterns have been discussed in previous videos. If you can sell at these low points, it will at least break through the starting point of the wedge pattern, which is the starting point of the drop.

We can also observe a similar situation in June 2023, where the main force intentionally lowered the price, and the low point continued to decrease, leading many retail investors to believe that Bitcoin was going to drop. In fact, this pattern indicates that the main force is deliberately accumulating chips, and later, it will return to the starting point of the drop.

Now, why do I still say that Bitcoin may drop by $10,000 even though it has risen? My view is that if the current position is indeed a bearish pattern, from the highest point of $49,000 to the low point of around $40,000, and combined with the candlestick pattern, such as the appearance of bearish candles, where the wick exceeds the body by more than 2 times. These several candlesticks also indicate a possible divergence between long and short positions. Of course, it is not ruled out that if it continues to rise, it may resolve this wedge pattern. However, we must be mindful that if this trend line is broken, I believe the theoretical target space should at least reach the low point of $40,000.

So, a $10,000 drop would mean dropping from $49,000 to near $40,000, which is a drop of over $9,000. Therefore, I hope everyone will be cautious at this point. If even the $40,000 level is broken, then I believe the next potential 100x long position will be below $40,000.

At that time, we can see if there is an opportunity to position ourselves, or we can observe whether there is some support in this range. For example, the support around $35,000 is also very strong.

Let's also take a look at history, as the wedge pattern has been consistently reliable. I remember in May or March 2021, when Bitcoin was at the high point of $65,000, there was also a significant bearish wedge pattern. Each high point was continuously rising, and the retracement low points were not sufficient, forming a wedge pattern, which eventually collapsed at that position. We can see that it returned to the starting point and later formed an inverted bullish wedge pattern, and then returned to the starting point of the drop.

So, if you want to go long in the contract, you need to consider the possibility of being liquidated if Bitcoin drops by 10%. Therefore, at this point, we should be cautious and observe whether there is support at the lower levels. We can then consider whether there is an opportunity to go long with 100x leverage.

Next, let's discuss whether Bitcoin may not drop and may rise again, or the timing. We can observe that in the past few days, Bitcoin has risen from the bottom of $25,000 to the position in October last year. I have calculated that it took 13 days for a turning point to occur at that position, 21 days for another turning point, and 34 days for a Fibonacci sequence turning point. Now, let's observe whether there is a possibility of a turning point at 89 days, which would be on January 22. We should carefully observe whether Bitcoin can break the short-term trend line at this position and whether there is a possibility of an upward turning action at 89 days. Of course, the premise is that we need to be mindful that the current position should not be broken. If the low point is broken, the drop may exceed $10,000, so we should still be cautious.

Finally, let's take a look at some indicators on the daily chart of Bitcoin, as when it should enter the 80 range and when it should not, and the KDJ indicator has now formed a death cross. Therefore, the KDJ is not only diverging, but the KD is also in a death cross. In the daily chart, the MACD also shows divergence, and the MACD histogram is getting lower. Since there is such a bearish signal, it is not advisable to chase after an uptrend.

For more strategies, you can join the live trading.

Candlesticks are king, and trends are emperor. I am Master Chen, focusing on BTC and ETH spot and contract trading for many years. There is no 100% method, only 100% following the trend. I update macro analysis articles and technical analysis review videos daily across the web! ImageFriendly reminder: This article is only written by Master Chen on the official public account (as shown in the image above). Other advertisements at the end of the article and in the comments are not related to me personally! Please be cautious and discerning. Thank you for reading.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。