Bitcoin Long-term Analysis
Updated
Hi all,
It’s been a while since I’ve posted an idea on BTC but I felt the need to share this chart with you all based on some interesting things I’ve found.
In this post you can see the long-term price chart of Bitcoin and a Fibonacci Pitchfork channel drawn through it. It really is quite impressive how well price has respected these Fibonacci levels. One important thing to take note of is how Bitcoin tends to gravitate back towards the median line throughout all the cycles. Even after the panic drop in early 2020 from Covid-19 news, the lower 0.236 Fib level held the price up.
What’s most important about this range (the 0.236 fibs and median line) is that it tends to serve as a consolidation period for Bitcoin before price starts going parabolic. The length of time for consolidation along this median line is about the same in both cycles (2015-2017 and end of 2018-2020), before price starts to go parabolic. If we look back in 2017, we see that the first big impulsive move from the median line up surged past the 0.236 level to the 0.382 fib level. Looking at the current price, we are seeing the exact same scenario unfold with price surging from median line up to the 0.382 fib level. This is where Bitcoin had a significant correction in 2017 that measured about -40% in price reduction. If we anticipate a similar series of events, we can expect Bitcoin to continue correcting down to those levels and then continue the bull run. One might look at the chart and notice that the last time the 0.382 level was touched (around
13K in 2019), we did not see a move up but instead saw more downside. However, at that time Bitcoin did not just undergo a halving event like it did in July 2016, and now recently we had a 3rd halving event in May 2020 which is why I believe this 2017 price action is much more reliable to compare to.
If we continue to correct down, many people will be calling for a retest of the 20k support, which at first sigh seems reasonable. However, comparing again to the 2017 correction pointed out on the chart, after price surged past the previous all-time high ($1,100), that correction never fell far enough to re-test that ATH as support. So if we expect a similar scenario, price will not fall far enough to test 20k. Additionally, the green moving average on the weekly chart is the 21 EMA which also tends to be reliable support in strong up trends, so we could see price stop around that point too.
Now let’s take a look at the daily chart.
First thing to note is price action has been clearly forming a descending triangle pattern, which is more often than not a very reliable bearish pattern on Bitcoin. The market sentiment tends to be overly bullish, with the Crypto fear&greed index showing a high level of 78 (extreme greed). I am unable to post this chart here, but glass node’s Unrealized Net Profit/Loss chart shows Bitcoin has entered the Euphoria-Greed phase and just like in June 2017, a correction followed. If we expect around a 40% correction (which falls within the 30-40% range of many of the 2017 corrections), we can expect price to reach the $23,000-24,000 range which lines up nicely with the structural support range and could also find support with the rising trend line.
Finally, looking back at the long-term chart, if we do find support in that range noted, we can expect the bull run to continue. I will be looking to heavily add my longs in this range. If this bull run mimics the same parabolic move we saw in 2017 then Bitcoin has the potential to reach $230,000 by Q3 of 2021. I posted this comparison by copying and pasting the bar pattern from 2017, so it will not follow perfectly but if these prices are reached this would obviously be phenomenal for Bitcoin and would surely require some sort of catalyst to launch the price this high.
Let’s see what happens, don’t forget to keep an eye on this chart over the next few weeks! Good luck all!
It’s been a while since I’ve posted an idea on BTC but I felt the need to share this chart with you all based on some interesting things I’ve found.
In this post you can see the long-term price chart of Bitcoin and a Fibonacci Pitchfork channel drawn through it. It really is quite impressive how well price has respected these Fibonacci levels. One important thing to take note of is how Bitcoin tends to gravitate back towards the median line throughout all the cycles. Even after the panic drop in early 2020 from Covid-19 news, the lower 0.236 Fib level held the price up.
What’s most important about this range (the 0.236 fibs and median line) is that it tends to serve as a consolidation period for Bitcoin before price starts going parabolic. The length of time for consolidation along this median line is about the same in both cycles (2015-2017 and end of 2018-2020), before price starts to go parabolic. If we look back in 2017, we see that the first big impulsive move from the median line up surged past the 0.236 level to the 0.382 fib level. Looking at the current price, we are seeing the exact same scenario unfold with price surging from median line up to the 0.382 fib level. This is where Bitcoin had a significant correction in 2017 that measured about -40% in price reduction. If we anticipate a similar series of events, we can expect Bitcoin to continue correcting down to those levels and then continue the bull run. One might look at the chart and notice that the last time the 0.382 level was touched (around
13K in 2019), we did not see a move up but instead saw more downside. However, at that time Bitcoin did not just undergo a halving event like it did in July 2016, and now recently we had a 3rd halving event in May 2020 which is why I believe this 2017 price action is much more reliable to compare to.If we continue to correct down, many people will be calling for a retest of the 20k support, which at first sigh seems reasonable. However, comparing again to the 2017 correction pointed out on the chart, after price surged past the previous all-time high ($1,100), that correction never fell far enough to re-test that ATH as support. So if we expect a similar scenario, price will not fall far enough to test 20k. Additionally, the green moving average on the weekly chart is the 21 EMA which also tends to be reliable support in strong up trends, so we could see price stop around that point too.
Now let’s take a look at the daily chart.
First thing to note is price action has been clearly forming a descending triangle pattern, which is more often than not a very reliable bearish pattern on Bitcoin. The market sentiment tends to be overly bullish, with the Crypto fear&greed index showing a high level of 78 (extreme greed). I am unable to post this chart here, but glass node’s Unrealized Net Profit/Loss chart shows Bitcoin has entered the Euphoria-Greed phase and just like in June 2017, a correction followed. If we expect around a 40% correction (which falls within the 30-40% range of many of the 2017 corrections), we can expect price to reach the $23,000-24,000 range which lines up nicely with the structural support range and could also find support with the rising trend line.
Finally, looking back at the long-term chart, if we do find support in that range noted, we can expect the bull run to continue. I will be looking to heavily add my longs in this range. If this bull run mimics the same parabolic move we saw in 2017 then Bitcoin has the potential to reach $230,000 by Q3 of 2021. I posted this comparison by copying and pasting the bar pattern from 2017, so it will not follow perfectly but if these prices are reached this would obviously be phenomenal for Bitcoin and would surely require some sort of catalyst to launch the price this high.
Let’s see what happens, don’t forget to keep an eye on this chart over the next few weeks! Good luck all!
Note
I am using a 2k monitor and realized the price chart may look squeezed on a lot of your screens. Simply click and drag the date range at the bottom and price range on the side to make it bigger and easier to look at!Note
Thinking we will see a drop soon. Market sentiment is still at extreme greed and now CryptoQuant is showing a negative netflow of all stablecoins to all exchanges which is a bearish signal. At the same time we are now starting to see Bitcoin netflow turn positive which signals bitcoin being sent to exchanges for selling which is also bearish.
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