Even the legendary Masterluc himself, gives too much credit to the MA200. And yes, it is an important support, because it acted as solid support in the 2014/15 bearmarket. However, before that, the MA100 was considered solid support, and it was broken in the 2014/15 bearmarket.
It seems that we go further down on the MAs, probably this time, MA300 will act as solid support, in the 2000's. A flash crash below that is possible, which would nicely line up with the 1800 area, that I had in mind since quite a while.
The moving averages move such, that they creep towards the sqrt trendline, because the trendline is getting flatter and flatter with time, so that the higher numbered MA's have time to creep towards it. Therefore the square-root trendline acts together with the weekly moving averages as support for BTC.
I stronlgy believe that after BTC has found the bottom in this bearmarket, and most weak hands are shaken out (as in the last cycles), we can start the new uptrend in 2020. I always also look at number of wallet growth, and daily transactions over at blockchain.info, and yes, btc is still growing exponentially, no surprises there :) Disruptive technologies always do that, and we are still far away from saturation point (will be when BTC users go into the billions)
I corrected the ATH date a bit behind, after I saw the excellent analysis from TradingShot, he figured out the cycle length, which is more accurate than my initial cycle length:
His chart, together with this one, should give a good estimate on the timeline and possible lows and highs of this and the next cycle.
Good luck fishing the bottom in the next few months :) The strong hands will be rewarded a few years later, I am very convinced of that.
of course not, you can always draw a line bellow, if not on linear chart, then on the log. if the line wont do, you can also curve it until it fits what you see :)
SebastianofMoon
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@SorinBlajan, Yes, hehe. But many people give too much weight to lines. Many say: If this or that support is broken, BTC is done for, etc. I wanted to show that this line of thinking is flawed.
Bullbearish
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Having a math background, I'm confident about your "Sqrt Resistance" curve and similar *non-linear*, long-term curves (see darobsta and other TAers). A few thoughts:
1. Long-term TA always trumps short-term TA.
2. Long-term TA should always be done on LOG charts, not Linear charts.
3. My own long-term BTC curve is even more extreme (more curved) than yours -- based upon my belief that the BTC high of late 2013 was "un-naturally" cut short because of the Mt. Gox fiasco. I estimate that the high would/should have been around 1500 (30% higher) based on good ol' Kentucky Windage. Possibly higher.
4. The above Mt Gox adjustment to the Sqrt Resistance curve puts the 2019 BTC bottom between 850 and 1250 in the March to May time frame. (IMHO)
5. The lower line of my posted idea (url below) is partly based on the above. This was posted last April before I became fully convinced that new, disruptive markets are exponential beasts that are best understood with curved (exponential) lines, especially in their early years.
6. Finally, you suggest we need to use longer-period MAs as we go forward. I agree. But instead of 100, 200, 300 MAs, might this progression also be non-linear with the MAs doubling: 100, 200, 400, ...
Peace.
SebastianofMoon
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@Bullbearish, Thanks for your detailed insight, excellent analysis! And I agree with your points! It could indeed go as low as 850-1250 in this bearmarket. And yes, a doubling of MAs could also be, that would basically mean that BTCs growth will be slower than initially thought, as the higher numbered MAs are currently at lower prices and need longer to catch up. Which MAs will be the important ones, we'll see after this bottom. If it hits MA400 support, it will be a strong indicator for your theory, if only MA300, then probably more my theory. Anyways, thanks for your analysis!
gkhowe
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If the 200 MA is broken, there's strong support at the 230 MA. that was where it bounced both in Jan and Aug 2014 and could act as support again.
SebastianofMoon
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@gkhowe, Yeah, or some higher numbered MA. We'll see when it hits the bottom. If it breaks through 2000, we'll know that MA300-400 will act as valid support. It will be very interesting, for future analysis.