Bitcoin at a critical point

Bitcoin finds some footing at critical point

Bitcoin reached a critical point on Wednesday after forming a large ABC Elliot Wave corrective pattern and falling from all-time highs near $20,000.

Despite regulatory concerns out of Asia, Bitcoin has stabilised at this critical technical point with price still in a Bull Market above the $9000 mark. Shouts of a crash based on a 50% decline from the highs seem premature given the overall volatile nature of the instrument and the unprecedented, meteoric rise last year.

From a purely technical perspective the price structure points to a Bullish impulse wave being just around the corner as long as price can hold above the $9000 mark.

What happens below the $9000 mark?

A break below the key area of $9000 will signal the end of this Bull run, at least for now, putting to the test the psychology of Bitcoin traders. 

We have, of course, all heard the endless forewarnings of a crash "any moment now" pretty much all the way up from $1000 to just under $20,000. Not too dissimilar to the end of the world updates we seem to get almost every year from someone, somewhere, holding a piece of cardboard with the words "the end is nigh" scrawled across it. However, if there is going to be a crash, it could well be below $9000 as this point marks the graphical manifestation of where the average traders’ emotions usually get the better of them.

One variable however which could prove interesting is the fact that most Bitcoin traders aren't following the normal rules of trading. Many are not only invested financially but seemingly emotionally. Some even seeing it as a fight for freedom from central banks and utterly prepared to be carried home on their shields if it comes to it. Since all markets are driven by human emotion, it seems interesting to ask the question - Is this collective fanaticism likely to save Bitcoin from an impending crash?

If the circumstances were to arise, in my opinion, it would seem unlikely. More likely is that market structure and human emotion would ultimately produce the same result they alwaysdo in a crash - panic selling. But it remains an interesting thought nonetheless.