pstowe
Long

Bitcoin’s Past, Present and Future: Price Action and Psychology

BNC:BLX   BraveNewCoin Liquid Index for Bitcoin

Over the past two weeks, the crypto world has come back to life and many are claiming 50K by December. Bitcoin recently hit $8500 after bottoming around $5800, roughly a 45% increase. This quick bounce has been catalyzed by the hope of multiple Bitcoin ETF’s being approved by the SEC in early August. Whales have gone long, causing retail money to FOMO, which will probably continue in the short term as price continues to appreciate.
Over the past year, those actively involved in crypto trading have seen countless charts, technical analysis , price predictions, and more. As bears have dominated the first six months of 2018, many charts, TA and price predictions have led to significant losses for new trades.
Since it was trading at $0.03 in early 2010, there has been only one chart that has never failed in helping traders spot the tops and bottoms of Bitcoin rallies and crashes. That chart is not one with countless indicators, analysis, exotic colors or different strategies. Surprisingly, I have not seen this chart explode on TradingView, YouTube or any other crypto related blog.
BraveNewCoin has calculated a USD price point for one Bitcoin ( BLX ) at tick intervals of 30 seconds for full trade history. Other key features it include fine granularity construction of OHLCV charting at fine intervals and daily T-WAP/ V-WAP. Also, all ticks are data time-stamped in UTC and published with a precision rounded to 8 decimal places.
This price measurement is beneficial because it is designed to respond to sudden market movements while avoiding index manipulation through BraveNewCoin’s robust index methodology. It also accesses institutional quality and historic price index data through an easy-to-use API . According to BraveNewCoin, technical analysis becomes much more accurate when using the BNC-BLX as opposed to a typical single-exchange. I have not seen a more accurate chart than the logarithmic BLX chart produced by BraveNewCoin.
During the rough first half of 2018, many analysts, including Litecoin founder Charlie Lee, were calling for a mutli-year bear market similar to that of 2014-2016. However, that does not seem logical according to this chart because Bitcoin’s 2017 rally resulted in a top at the middle trend line , not the top trend line .
If you zoom in, price bounced perfectly off of the trend lines multiple times, confirming their validity. Last month, as Bitcoin approached the bottom trend line my eyes were glued to this chart in hopes that it would hold.
The second low of 5800 nearly kissed the bottom trendline , with the higher low of 6080 touching it perfectly, and bouncing up with great strength. In the days following the 6080 higher low, big buyers came in and the reversal was confirmed. Now, Bitcoin is currently trading at roughly $8400.

With many claiming this is a bull trap or major short squeeze before the real bottom at $4,000, I think otherwise. With the potential approval of multiple ETF’s in the coming months, the odds that the bear market has ended are high. Institutions are looking to be buying upon approval of the ETF’s, which will likely send Bitcoin to new all time highs this year.
That being said, a pullback to the low $7000’s or high $6000’s could definitley be possible over the next few weeks. If I am lucky enough to see Bitcoin pull back to the trend line , I will be opening a very highly leveraged long after confirmation of a bounce off of it.
There is no telling where Bitcoin will go in 2019, but judging by the middle trend line , it is not too far of a stretch to push for $50,000 - $60,000. Granted, this is largely based on the SEC’s approval of multiple ETF’s and big institutional buying.
We will be watching to see if this chart holds true in the rest of 2018, as it will likely be a good spot to close out most long positions upon contact with the middle trend line .

Credit to my buddy Charlie Parkhurst for the discovery of the BLX chart (LA18WOLF39 on TradingView)


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