How deep will the Bitcoin retrace?

We observe a classic retracement of Bitcoin prices, after the market saturation on breathtaking run to $20K. Some of long term investors pulled the trigger to exit and fix an awesome profit before the Christmas, some traders listened to loud woes about possible bubble and the scam. There were rumors that one of the Bitcoin founders has sold all of his assets. A South Korean officials stepped in, warning about too fast appreciation of the cryptocurrency and lack of the security from hacker attacks. Anyway, we see a downside pressure and ongoing retracement. The question is; ‘What’s next? How deep will the Bitcoin retrace before renewing the bullish run?’
We need to understand the motivation of people, who have enough power and money to manipulate the mood of the crowd. What is their best interest? One of possible answers could be a simple wish to get in to the market, buying Bitcoin at lower price. They made a huge step in the sense of regulation of this new type of asset, by launching Bitcoin futures on CBOE and CME. The second step is to kick out of the market as many retail traders and investors as possible. So I could suggest a further appreciation of Bitcoin, but the question is when should I join the party?

Technical analysis tells me to be cautious of pulling the trigger too early. I would expect better prices to get in, with further southwards pressure. Two different ways to show the BTCUSD daily chart are represented below. The first one uses a combination of slow MACD and fast RSI technical indicators. This combination usually works well with most of the assets. You can see an obvious bearish divergence on the first chart below. The prices were posting higher highs, while MACD and RSI were showing lower highs. Despite the fact, that MACD histogram already turned negative (which is usually a signal that the divergence worked out), I think that there is more room for retracement. One of the signs is the cross of blue and red MACD lines. The second one is RSI at 64% currently. Usually it moves down to test 50% level before reversing. I would consider the retracement deep enough when BTCUSD would test the blue dotted median line. But again, it’s a conservative point of view, and we could not see such low prices.

The second daily chart below uses simple Fibo retracement levels indicator. The latest bullish run started in November is the base for calculation of the retracements. Please note, that daily close prices took in count here, but not highs or lows. We can see here that 23.6% Fibo supports close prices, while there are shadows (lows) breaking it temporary. Very crucial for the technical analysis will be this particular day, because we already see s long shadow on today’s candle. The question now is about the body of this candle, will it be big enough to confirm further slide, or will it be thin (or even bullish?) to confirm reversal. Conservative position would be to go long not earlier than 15500/800 range on possible test of blue support line.

One more chart below has H4 timeframe. We see here an obvious break through the latest support line, which is bearish signal. On the other had, we see a support by the prices bouncing from local lows (blue arrow). MACD is in bearish mode. RSI is far below 50% level with more room to go down before oversold levels. I would expect a comeback of the RSI to 50% level and further slide after that. Such a scenario would confirm my suggestion about deeper correction, while an opposite outcome would indicate a false bearish break.