Here are the bullish and bearish arguments:

The Bullish Arguement: Everyone is now in fear mode. Stops have triggered below the 200-day moving average near 8350. There is no bounce. BTCUSD trades so bad, institutions would not be brave enough to buy. We see support near the 7900-8000 level on Gann charts (not shown). The 14-day RSI is at very oversold levels. The 14-day RSI is a long-term momentum indicator. So, if BTCUSD turned up, the 14-day RSI hints bitcoin would have room to run on the upside. The dip in the hash rate the came before the decline was just a normal hick-up created by a hardware upgrade. So, there is no massive problem in the crypto system. That means the drop was just a corrective flush lower. Also, ETHUSD is sitting at support in the 160-170 zone.

The Bearish Argument: The decline is related to a bigger problem in the crypto system. Elliot work hints at a move to either ~7400. That level is the 62% retracement of the big chunk of the recent up move. Momentum algorithms have likely switched to negative and trend following players will be selling rallies. Also, a move to 7400 could start putting pressure on S9 miners, which could create more panic selling. Finally, there is an unfilled gap on the CMEBitcoin futures chart near 6400. Gaps sometimes get filled before up moves resume.

Bottom Line: If you are brave, you can take a shot at having a small long position. You can lean on support near 8k and bet that despair has reached its peak. Then if BTCUSD broke back above 8500, you could add to long positions. Conversely, you can step back and see if 8k holds. If 8k doesn't provide support, then BTCUSD could fall apart. In that scenario, you might be able to enter into long term longs at much lower prices like 7400, 6400, or 4500.

DISCLOSURE: Token Metrics is a regular publication of information, analysis and commentary and does not provide individually tailored investment advice.  The Token Metrics team has invested and advised in many blockchain companies. A complete list of the team disclosures, advisory roles and current holdings can be viewed here: https://blog.tokenmetrics.com/disclosures/.