Welcome to the Jungle

It looks like Monday may be a big down day in the market. I think BTC and crypto are indicating an extension of last week and not capitulation/catch-up selling. This is a major support break and the next major support is around $30,000.

Back in October I posted this chart in BTC Return to Normal, and I think this is what is playing out.

Speculation was so powerful that it pushed the price back to a new high. Bears may get two shots at this because there could be a "return to normal" bounce still ahead. If not, then the next few weeks and months are going to be absolutely brutal for anyone trying to buy the dip. I would expect a bounce around $30,000 for a return to normal. If not, it will slice right through $30,000 and maybe make a bounce from$20k to $30k before falling to a new low.

I don't think a good scenario is coming for BTC or crypto in general, but if so, then this larger channel I've drawn will be quickly recovered.

Instead, I think BTC will look more like Square (SQ), with that support horizontal being down at $30,000.

I sold my Twilio (TWLO) puts on Friday and loaded up on SBNY puts in case crypto cracked over the weekend. That's my only play on crypto right now. For myself, I view this all as a major signal for all risk assets, then I can safely put the pedal to the metal and short into weakness. Conversely, if BTC and crypto do reverse strongly, I will take that as a signal to leave my cash on the sidelines for now.