In the August 30th post titled Is Bitcoin About To Drop 25%?, I had stated the case for a drop of at least 25% in Bitcoin, adding /BRR (Bitcoin futures) and GBTC (Grayscale Bitcoin Trust) as potential swing trade ideas both on the long side (with a buy signal to come on break above the downtrend line) as well as a short trade with a sell signal to come on an impulsive break below the 9454* support level on /BRR. (*that previous chart was the Sept futures contract, which has since rolled to the December contract with that same support line now at 9682 due to the price differential between the two contracts).

Following that Aug 30th setup, /BRR went on to first break out above the downtrend line, rallying  about 10% before reversing & coming back down to just above the 9454 support where it was once again highlighted as both a long or short trade in yesterday’s GBTC/BRR Bitcoin Trade Setup post. Yesterday’s setup stated that Bitcoin would trigger a long entry on a breakout above the minor downtrend line (which never occured) or as a “a much longer-term swing short on an impulsive & solid break below the key 9454 support”. As far as the “impulsive & solid break” part of that sell signal criteria, it doesn’t get any more impulsive or solid than a near vertical, 15%+ intraday plunge.

In the Aug 30th setup for this still unofficial swing trade idea, I had stated that “I would add a first target around the 11.00ish support level (not marked on the chart above) with a second target set just above that 8.82ish support level with the potential for additional targets to be added, depending on how the charts develop going forward.”, which remains the case for now. In fact, following a brief momentum-fueled overshoot of that first target around 11.00, GBTC snapped back up to close right on that target at 11.06 with a horizontal line added to that level since in both yesterday’s chart & the updated chart above.

Congrats to those that caught some or all of the move so far or those that were long & able to side-step the recent plunge. Bitcoin is quite oversold on the near-term time frames so the odds for a snapback rally anytime now are fairly high with an rally back to the 11.00 area on GBTC or the downtrend line offering an objective add-on to an existing short or new short position. Ditto for the minor downtrend line on /BRR (which is not extended on my chart above).