This week I am going to be touching up the what happens next scenarios for crypto and in turn give a monthly forecast and the potential best and worst-case scenarios for Bitcoin.
One thing I observed this week was a disparity between the monthly price close of Bitcoin and the monthly price close for the Crypto Total Market Capitalization.
If you look at the attached price charts below side by side you will note that CTMC chart finished the month of January squarely in the red, while Bitcoin performed a slightly positive monthly close, albeit the candle does look very indecisive given the whopping reversal from $49,000.
Source: TradingView.com
What can we gather from this? I presume it means that the direction of the entire crypto market is probably lower this month, however, due to the indecision towards Bitcoin and of course the positive elements from the spot ETF, traders aren't that sure, and some retrace higher is likely before Bitcoin eventually rolls over.
This is just my assumption, and it plays into my theory that Bitcoin is soon to test and reverse around the $45,000 area. Regular readers of Biyond Daily will know this.
Source: Tradingview.com
The more interesting question here is what happens to Bitcoin if it does start to roll over, and what danger lies ahead if Bitcoin selling really ramps up.
This is of course an odd notion, but given the hype that BTC is only ever going higher due to the upcoming halving event and the ETF launch, I for one remain nervous about the first and second quarter of 2024.
This very daring chart I have attached shows what could happen if Bitcoin reverses from $45,000 this week and then breaks under $40,000.
Source: TradingView.com
In this scenario, the 100% Fibonacci sequence of the swing to breakout point comes in at $32,000. This is a massive technical level and the 2023 breakout area, plus the location of the 200-week MA, and a major monthly trendline.
The worrying part here is what happens if Bitcoin breaks under $32,000. I am going to attach a worrying chart below showing you the sequences and targets if that were to happen.
Source: TradingView.com
With the worst-case scenario and warning out the way, it's time to look at the best-case scenario for Bitcoin.
For example, if Bitcoin does move higher this week, the bullish breakout point comes at $45,200. Gains above this level should trigger a minimum test of $47,000.
Above $47,000 and the evidence I have from my chart is that Bitcoin then has a free reign to set a new high of around $59,000.
Source: Tradingview.com
If that were to happen I would be shocked if Bitcoin would trade much lower than $44,600 for the rest of the year and Bitcoin then becomes a serious buy on dips.
Source: TradingView.com
In this case, my targets would be $75,000 and $85,000. My Q1 target would be basically $59,000, with dips back to $52,000 being seen as big buying opportunities with stops under the current 2024 high.
