Hi friends! Welcome to this update analysis on Bitcoin! Today, we're going to be looking at another comparison of the current Bitcoin
market (on the left) to the bottom formed during the 2015 bear market (on the right.) Lets' get right to it!
The first thing I want to draw your attention to, is the current 50 EMA
(in orange.) Looking at the chart on the left, you can see that the 50 EMA
is showing incredible support. In fact, if you remember on February 24th, when Bitcoin
fell 9% in one day, I posted a chart telling everyone not to freak out, because Bitcoin
had fallen directly to the 50 EMA
, and we were still holding it. Now, here we are a month later, and we are STILL holding the 50 EMA
. This is very special, because Bitcoin
hasn't held the 50 EMA
like this, since the bull market was in full swing. These little nuances in the market are indications that the tide is turning. It's time to pay very close attention, because this market is beginning its metamorphosis.
The similarities to the 2015 bear market bottoming cycle are incredible. We can see that on both charts, price fell exactly to the weekly 200 MA (in green.) Also on both charts, we can see that the 50 EMA
was resistance, and then it became supportive. However, this is slightly more pronounced on the current chart. In addition to the similarities between the moving averages, we can see that price also formed an inverted head and shoulders
pattern on both charts (below red trendlines
.) Looking at the 2015 chart on the right, price broke out above the second peak's resistance (red trendline
) and skyrocketed to the 61.8% retrace. Looking at today's chart, it's clear that price could do something similar. The current 61.8% retrace is right around 5236. However, as I've said in many other analyses, I don't think that Bitcoin
will rip like that right now, because I doubt it will be able to surpass the substantial resistance that is in it's way, which I have shown in previous analyses. With that said, if Bitcoin
confirms above the red line on the current chart, my view on that will quickly change. I simply doubt that we will see such a move right now. You have to understand though, that is my personal opinion talking. There is a difference between my opinion as an analyst, and the evidence that I act on as a trader. In other words, I may have an "opinion" on the likelihood for something to happen, but that is just an OPINION. What I actually do, depends on real evidence that materializes on the charts. So, as analysts, we often devise opinions on what the market will do based on the data, but it isn't wise to trade an opinion. It is wise to trade evidence. Therefore, I have the opinion that price will most likely continue to grind sideways this year, but the second I see a confirmation above the red horizontal trendline
, that "opinion" will be instantly changed by newly tradeable evidence. That is what being a good trader is all about. It's about not being nimble and making moves when the time is right, even if that means stepping away from your previous opinions on what the market may or may not do.
Looking at the chart on the right, we can see that during the 2015 bottoming sequence, price broke out above the red resistance line, and exploded directly to the 61.8% retrace. Comparing that to today's chart on the left, we can see that such a move would catapult Bitcoin
up towards the 5250 range. Interestingly, the current chart shows a few candles from mid November, that formed accumulation wicks off of the 61.8% retrace. So, there is a high probability that the 618 will act as initial resistance when Bitcoin
finally makes it up there. A quick glance at the chart on the right, shows what is likely to happen next. We will probably chop underneath that level for a while, and then explode above it, as Bitcoin
rallies up toward the major resistance at 6000.
Again, I still don't think that will happen until later this year, but if we start to see price rising above the 4200 level, I will be quick to pivot
on that opinion. It is also note worthy that the scales between these two charts are a bit different. The chart on the right took 300 days for the inverse head and shoudlers to break out, while today's chart is only 124 days into the pattern, yet it is similar in development. So, perhaps we will see a breakout that happens sooner than I had originally anticipated. Either way, until price gets above that red line, we can expect the sideways grind between the low 4000s and the mid 3000s to continue.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***