A blow-off top may yet appear, but market composition has changed and 20% dips are being bought with “aggression,” says Filbfilb.
Bitcoin (BTC) is not far from a blow-off top price implosion but investors are “aggressively” buying the dip.
Speaking to Cointelegraph on Jan. 8, popular analyst Filbfilb revealed that Bitcoin was due a corrective phase given the pace of recent gains.
Filbfilb: I don’t think we’re far from blow-off top
On Thursday, BTC/USD exceeded $40,000 before a spectacular reversal saw a $2,200 drawdown in under five minutes. Thereafter, fresh attempts to flip $40,000 to support were met with rejection, and publication-time levels circled $38,400.
With market participants keen to know what will come next, Filbfilb told Cointelegraph that a new style of buying was fuelling repeated all-time highs. As with any market, however, vertical gains cannot last forever.
“Bitcoin has continued to make increasingly smaller consolidations after failed sell off attempts. This points to a climatic conclusion at an increased probability in terms of time. I don’t think we are far from a blow off top, but how high that could go is anyone’s guess,” he said.
“In terms of a correction, all we know today is that 20% corrections are bought with aggression. Until that changes then I hate to use a cliche but the trend is your friend.”
This automated trading style itself points to a new class of investor needing to enter the market with larger amounts, rather than the casual manual exposure which characterized the 2017 rush to $20,000.
“It was more that there are still obvious signs of accumulation algorithms and that accumulation algorithms seldom care about the price when their goal is to invest X$ in Y time period,” Filbfilb added.
Upside in “uncharted territory”
At $40,000, meanwhile, a single Bitcoin passed the value of the United States median annual salary for the first time.
The largest cryptocurrency’s 2021 gains alone were in excess of 42% at Thursday’s peak of $40,400, with the pullback that followed amounting to around 9% losses. While analysts retained the possibility of further corrections, the mood on Friday was firmly bullish.
“Just like the $20,000 peak high was way higher than everyone expected in 2016/2017 to be the top on Bitcoin. That’s how markets work.”
Statistician Willy Woo also noted the lack of references left on the Bitcoin spot chart to calculate resistance, given the latest all-time highs. Only Fibonacci sequences remained.
“When there’s no historic resistance levels, magic numbers in nature is all we have for support and resistance bands. Bitcoin is in unrestrained price discovery in uncharted territory, literally,” he wrote.