Bitcoin Crashing… Don’t Panic!!!
Is it time to panic? No dont panic, never panic! The top is not even close to being in for bitcoin in todays video ill, be breaking down the technicals and what you need to know about the current market situation for bitcoin. My name is lark everyday. I make videos talking about cryptocurrency investing. So if thats a topic youd like to learn some more about, maybe just stay up to date with they should definitely subscribe to lark davis channel ill. Also take quick, second tap on that thumbs. Up for the youtube algorithm massively appreciate that anybody who wants to receive notification should also click on the notification bell by the way. If you are a crypto currency trader, then you need yourself an account over on femex. You can long and short all of the top coins in the market, bitcoin ethereum, solana cardano. They have all of the good stuff and right now they have an amazing promotion going on where you can get up to 3 hundred dollars worth of trading bonuses. So if you use the link down below youre gon na get ten percent off of your fees, the standard 100 dollar trading bonus promotion, as well as an extra thirty five hundred dollar deposit bonus. Depending on how much you deposit to start trading with just use that link to start your account now lets go ahead and get in to the charts, so the old bearish divergence here has basically been playing out to a t, weve seen, of course, the price of Bitcoin coming down today now, i think its really important to bring a bit of perspective into this here.
We just we can get the rsi off here for now. I think its really important to bring a bit of perspective into the market and try to understand how things are currently playing out and how serious the current situation is. So so far up to this point, the price of bitcoin is only down well at its peak today was only down 11.5 percent from the recent all time high back here on the 10th of november now, back in october, we had a 14 percent peak to bottom Move that was a bit of a bigger move by a couple percent and look. I would like to point out this, because this is probably even more important for you to kind of take into appreciation here is that your average bitcoin correction during a bull run is 20 plus, so we havent actually seen a big 20 move for the cryptocurrency markets. In a little while now last time we had one of course was back here early september. This was a 24 25 top to bottom move that fit in very nicely with what you typically see happening during a crypto currency, bull run. These kinds of big volatile moments are super common theyre to be expected, anticipated and made advantage of when they come now. This time, back here in september, was a great time, of course, to buy buying when the markets down by like 25, like this, in what is you know, still a beautiful uh, you know up trend for the market tends to be a pretty damn good time to Get yourself a position now, of course, that was led by the 20 flash crash, but the it did finally bottom out around 25.
So, just to give you that perspective that the current 11.5 crash is nothing thats, nothing thats a thats, literally a tuesday in bitcoin, literally a tuesday, nothing too exciting going on here now. Look if we actually came back down for a 20 plus kind of move. Where would that bring us? Well itd bring us back down to this very important area of price resistance, flipping, of course, into price support, so that is around 50 to 53 000. That would be a 23 correction down if we came up to this more recent area of price support in this area is only 17 18 19 20 down around the 55 000 mark now, im not saying thats our most likely scenario where were gon na see the Price heading im just giving you that, for reference to understand that this is a volatile market and volatility is to be expected, its totally normal ive been talking about for the last few days that we can see bitcoin coming back down to re test. Some of these key areas of price support so now were currently right around the sixty two thousand dollar price support area. Our next major area well be watching out, for is, of course, sixty thousand dollars id be curious to see whether or not we are able to um have another test on this trend line right here, well, see, of course, over the next few days. If we get another test on that coming down, but we might break through that – and of course come back down to hit 60 000 or an even lower number moving forward.
But does all of that mean that the bull run is over? Were never gon na see? Another new all time, high price for bitcoin, that this market cycle is finished. No, no! No. I do not believe that for a second bitcoin is going to go to a hundred thousand dollars now well. Plan b be proven right were gon na get 98 000 bitcoin, but then november. Who knows? Who knows? That would be great its looking um less likely at this point, but anything, of course, is possible encrypted. I think a hundred thousand dollar bitcoin by the end of the year still definitely on the books and look if im wrong and we dont get a hundred thousand dollar bitcoin this year. Its just an arbitrary time date anyway, then well get a hundred thousand dollar bitcoin. In q1 next year, oh no have to wait a few more weeks, big big big drama that big drama. Here we can see by the way uh we were talking about the um price of bitcoin coming down to if we did have a 20 price correction, so in this sort of 53 000 uh zone. Now, where has an incredible amount of supply bitcoin been transacted at? So we can see here this is the realized price distribution for bitcoin. The volume of bitcoin last moved above one trillion dollar market cap has now reached 3.45 million bitcoin. This means that 18.3 of the supply was transacted above 53 000, demonstrating a lot of capital inflows.
Now that means that all these people who bought recently theyre not going to want to realize losses necessarily some of these people will if the market does turn quite bad, these people will sell out a loss right. The the buy high sello crowd those guys love doing that stuff. However, a lot of this is going to be institutional money coming in you know, big money from funds and family offices all this stuff. These guys are able to ride out a price move from 58 thousand dollars down to 55 fifty thousand dollars or sixty two thousand dollars down to fifty two thousand dollars. These guys are okay with that, because theyre investing in a store of value asset. That is a long term investment for them, the the tourists. Those are the guys that will be you know, buying at sixty nine thousand dollars and capitulating it at support down at fifty three thousand dollars or whatever. If that were to happen – but i just bring this up because its really important to understand that a lot of bitcoin has changed hands above the 53 000 mark, meaning theres a lot of people bullish on the future of the price of bitcoin. Going up, of course, and that a lot of that will be um, hopefully stronger, handed money, but i think this makes the mid 50 000 zone a very, very key area of price support for bitcoin. So, like i said, theres no im not sure were gon na get down that low during this price correction, but it is, would fit within the norm of what we see happening for bitcoin.
We can also see that open interest is still mega mega mega high. So we are still seeing open interest rates just at at record highs. Basically, so we did get a new record high with the all time price high for bitcoin back here and now, of course, the open interest is still incredibly incredibly high. Now what usually happens when we have super super high open interest is that we have a lot of volatility now we havent had any extreme open interest volatility yet so we could see some more price volatility coming in, as we see more of the over leveraged traders, Uh being washed out a bit in the market, so thats still something to keep in mind there as well, as can, of course, create those those cascading effects for the price when these start moving also weve seen ethereum breaking through um its uptrend, so the uptrend hasnt Broken, of course we can see this uptrend has been in place here, since, back in october, been a beautiful, beautiful uptrend. However, that uptrend has now broken. We are seeing it falling down below that. We do have a major area of price support, of course, for ethereum. Here around um four thousand dollars, so that would be a very, very key area of price support. I think for ethereum to hold not only, of course, being up just a big beautiful round number, but also chart wise lining up as a major area of price support.
For the asset, so with both bitcoin and ethereum, the two premier cryptocurrencies, just together, account for more than half of all of the value in the cryptocurrency market combined hitting downtrends. We could be in for a bit more turbulence before we move on to our next new. All time high here is well just again a reminder of perspective for you and how volatility is just such a normal part of this market, so this is the chart from 2017. Actually so, in 2017 november 2017 we had a 29 drop for bitcoin, so we had a beautiful run up boom 29. Actually over like five days. It was pretty crazy and then we had a single day in late november, where we had a 25 flash crash man that was crazy times and yet, in spite of all of that price drama, the month still finished 55 higher. How crazy is that? How crazy is that, in fact, from the mid month crash where we saw the price go down by 29 to the recovery to the end of the month, and even with that big flash crash that happened, we still saw the price of bitcoin go from about 7. 800 to over 10 000 by the end of the month, so just goes to show you. This is a volatile asset class and the volatility in the price is a completely normal feature and part of this market. The sooner you get get on board with that your lifes going to be so much easier.
Its true its true now lets talk about the top, not even being close to being in this here is the mayor multiple. So we can see that this chart here. We have got basically what we need to know is that this line right here shows the bottoms of the mayor multiple after these uh bottom out scenarios. What do we tend to see happening? Well, we tend to see the price of bitcoin ill, get myself off the screen there. For you, we tend to see the price of bitcoin rallying afterwards, so we can see here we had a bottom on the mayor, multiple followed by a major rally. We had a bottom, followed by a rally right. We had a sort – i guess maybe a false bottom. You could say that followed by a short term rally. Then we had a bottom over here, followed by what was basically a massive massive bull run. This kicked off a massive bull run right here and, of course, we had a big bottom here, followed by another massive market rally. A double bottom here, followed by a big end of year, blow off, so we have recently actually hit a bottom scenario here, so that was back in july. We actually hit a bottom, so a bottom tends to indicate that we have a new liftoff coming now. We can also see that all of the bull markets have finished previously with these massive massive spikes. So we can see here, of course, first bull market.
Second bull market uh, well its the this is actually this. The peak of the second bull market here this was the the first big run up of it third bull market. Here uh. This is sort of the the mini uh bull market. That happened within the bear market uh back in 2019, and this has been the 2020 2021 um bull market. That weve seen here so now were getting ready for the next phase were getting ready for the the 2022 bull market were getting ready for the next major run up, and we see as well that uh, this particular um distance away from the 200 day moving average. Here did not show the extreme level of divergence that you would want to see in a market top, so you can also see here on the the pricing bans that we also want to see a stronger divergence above the top line here. So this is a chart showing me that we are not close to a top yet also want to share this chart by kevin svenson hes. I really like this chart ill bring ill, bring myself back on the screen here, but i really like this chart from kevin. I think its um uh very interesting to see how close some of these charts are working with one another. So this is the 2011 gold charts compared to bitcoin 2021. Of course, golden bitcoin both store value assets. The charts between gold and bitcoin have had some incredible similarities, so this is his three peaks and a domed house chart.
So, as we can see here, the three peaks have come in weve had our basin, which is the bear, trap. The first floor, which we are still grinding our way through and then, of course, we are looking for the roof, the roof, which will be the the blow off top here for the market. That is, of course, what we are keeping our mind our eyes out for here and, of course, after the roof, which, who knows how long thats going to take for us to get. Maybe that comes in december, maybe, as ive been saying, were more likely to see the uh bull market rolling over into 2022. Where were going to see the peak price coming for bitcoin, maybe its going to be in q1, maybe its going to be. You know early q2 or something like that and then well go into a bear market after that now whats interesting too, about um the similarities here and i want to bring up – is that actually you know what happened to gold afterwards, unlike previous bitcoin cycles, where weve Seen 85 90 drops gold actually only corrected by about, i think, 48 or 49 at it from its uh peak to trough. It was multi year bear market for gold right. After that massive run up. It was multi year bear market things, got pretty brutal for the old yellow metal there, but it was only a 50 decline which im thinking if we see bitcoin get up to fifty two hundred thousand dollars and then it only retraces by fifty percent.
Imagine that bitcoin goes to two hundred thousand dollars. Fifty percent drop back to a hundred thousand dollars and thats the bear market bottom. That would be crazy. Thatd be crazy id love to see such a scenario, because it means that anybody whos buying bitcoin today will be in profit during the bear market which ill tell you makes a lot easier to hold your bitcoin when its in profit versus when youre just holding heavy Bloody bags for a year or two very different psychologically for you, but i love this chart. Josh shout out to kevin there for uh sharing this cool chart. I really like that and this one here from glass node. So this is the bitcoin top cap price model. So this is originally proposed by willy woo calculated by applying a factor of 35x to the all time average cap. So basically, basically, what you need to know about this is that this puts bitcoin at a 4 trillion dollar valuation with a top price around 214 000. So thats, where we would see the the blow off top happening for bitcoin. That would be the bull market peak at 214. 000. So basically, we get up to touch this red line here. Thats, okay, id take that 214 000. Sure that sounds fine by me. Ill. Take a 214k bitcoin, not a problem man, not a problem. That sounds just fine by the way heres. The final thought for today. Sometimes the price goes down by a few percent and you go and you look in the comment section or hop on social media.
The the sentiment is, you know, game over man game over the reality. Is the game is never over in markets. Even bear markets offer incredible opportunities right. You just keep investing keep teaching yourself, you keep learning. You dont give up what happened to a lot of people back in 2017, they came in late, they bought the top, they sold the absolute bottom, they stayed out of the market for years, and some of those people are now back buying buying high again and theyre. Probably gon na sell low later volatility in markets is completely normal, as ive showed you at length in this video. If you keep yourself focused, you are going to do just fine in this market. You have to have that long term, game mentality, and if you can play the long term game, then youll realize that winning is a near certainty anyway.