A few weeks ago, I wrote a piece called “Why Bitcoin May Make A Powerful Move Soon.” In that piece, I gave two primary reasons why I believed that a major move was ahead: 1) because Bitcoin was forming a descending triangle pattern – and – 2) volatility had fallen to incredibly low levels, which is often what occurs before significant moves in the financial markets. On Wednesday, Bitcoin fell by nearly $1,000 or approximately 15% (at its worst levels of the day), which caused the cryptocurrency to break below the key $6,000 support level that I was watching. This is a very bearish sign, provided it isn’t negated by closing back above $6,000.

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The longer-term chart shows the descending triangle pattern and today’s breakdown under the $6,000 level. For now, the bias is clearly down. There is no telling how low Bitcoin can go from here, but it wouldn’t be surprising to see it trade in the low 000s or even under $1,000 as air continues to come out of the crypto bubble.

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The ongoing cryptocurrency meltdown doesn’t surprise me in the least bit – I warned about this scenario heavily in late-2017 and early-2018 at the height of the bubble. I repeatedly claimed that cryptocurrencies would follow the same trajectory as dotcom stocks in the early-2000s:

I actually hope that Bitcoin falls under $1,000 because I’ve been saying for a long time (before the price explosion) that I like the idea of having some Bitcoin as a diversifier:

For now, Bitcoin’s trend is down and it’s too early and unwise to try to call the bottom and catch the falling knife. I believe that a continuation of the cryptocurrency bear market will result in many altcoins becoming virtually worthless. I will publish updates from time to time to evaluate whether Bitcoin has stabilized yet.