Bitcoin 2013-2015//2017-2019 Comparison & Analysis
Has BTC found its bottom? My guess is probably not.
Looking at a weekly log chart helps us visualize the trend that has been established throughout Bitcoin's life time since its inception.
By analyzing the structure of Bitcoin's market structure, we can see a reasonable-enough resemblance between Btc's 2013-2015 cycle, and the 2017-Present market cycle.
With that said, here is my breakdown of the price action thus far.
Hypothetically speaking, if Bitcoin were to replicate the decline from its 2013 top to its 2015 bottom, it would take about 59 weeks and yield roughly an 87% decline.
From top to bottom, that would have btc bottoming around the 2,500 level in the later half of January (marked by the short purple line).
Disregarding 2013-2015 market history, we see that the 200 Day Moving Average is currently holding firmly as a support from the December 14th dump to around 3,150-3,200.
December 14th Significance: Ironically, exactly one year earlier, Bitcoin found its top just shy of 20,000...Coincidence?
The blue footnote under the blue arrow represents where Volume starts to increase ahead of last year's parabolic advance. The pink box shaded green represents a crucial area where we can identify a key area based on high volume: The lower yellow line represents extremely strong support as the 1800 level held during this time, & the upper green line represents a prior resistance turned to support around the 3000 level, which also qualifies as a significant psychological level.
As we can see, once the price broke out of this area, the 3000 level was retested to further validate the concept of prior resistance turning to support.
The major reason for not being sold on Bitcoin having already found its bottom lies purely in the Volume profile.
The large red candle enclosed in the golden rectangle illustrates the capitulation phase of the 2013-2015 market cycle, as Bitcoin found its bottom, and completed the final phase of the bear market.
Clearly we have not yet seen that for this current market cycle, which leads me to believe we still have room to go further downwards.
Interestingly, the apex of the triangle currently forming perfectly coincides with the 59 week duration (seen in the 2013-2015 market cycle) with the hypothetical ~87% decline, currently poised to break around the 20th of January, 2019 (+/- 7 days).
With all that said, I have absolutely no idea what is going to happen. This is solely observations and hypothetical scenarios given the price history of Bitcoin, & my perspective from a technical standpoint. Absolutely anything can happen, as proven countless times before in this extremely volatile marketplace. I currently do not own any Bitcoin and do not plan to until confirmation of a bottom.
-None of this is Financial Advice- Just some ideas. Happy Trading!
Looking at a weekly log chart helps us visualize the trend that has been established throughout Bitcoin's life time since its inception.
By analyzing the structure of Bitcoin's market structure, we can see a reasonable-enough resemblance between Btc's 2013-2015 cycle, and the 2017-Present market cycle.
With that said, here is my breakdown of the price action thus far.
Hypothetically speaking, if Bitcoin were to replicate the decline from its 2013 top to its 2015 bottom, it would take about 59 weeks and yield roughly an 87% decline.
From top to bottom, that would have btc bottoming around the 2,500 level in the later half of January (marked by the short purple line).
Disregarding 2013-2015 market history, we see that the 200 Day Moving Average is currently holding firmly as a support from the December 14th dump to around 3,150-3,200.
December 14th Significance: Ironically, exactly one year earlier, Bitcoin found its top just shy of 20,000...Coincidence?
The blue footnote under the blue arrow represents where Volume starts to increase ahead of last year's parabolic advance. The pink box shaded green represents a crucial area where we can identify a key area based on high volume: The lower yellow line represents extremely strong support as the 1800 level held during this time, & the upper green line represents a prior resistance turned to support around the 3000 level, which also qualifies as a significant psychological level.
As we can see, once the price broke out of this area, the 3000 level was retested to further validate the concept of prior resistance turning to support.
The major reason for not being sold on Bitcoin having already found its bottom lies purely in the Volume profile.
The large red candle enclosed in the golden rectangle illustrates the capitulation phase of the 2013-2015 market cycle, as Bitcoin found its bottom, and completed the final phase of the bear market.
Clearly we have not yet seen that for this current market cycle, which leads me to believe we still have room to go further downwards.
Interestingly, the apex of the triangle currently forming perfectly coincides with the 59 week duration (seen in the 2013-2015 market cycle) with the hypothetical ~87% decline, currently poised to break around the 20th of January, 2019 (+/- 7 days).
With all that said, I have absolutely no idea what is going to happen. This is solely observations and hypothetical scenarios given the price history of Bitcoin, & my perspective from a technical standpoint. Absolutely anything can happen, as proven countless times before in this extremely volatile marketplace. I currently do not own any Bitcoin and do not plan to until confirmation of a bottom.
-None of this is Financial Advice- Just some ideas. Happy Trading!
Comment:
1/30/19
Update:
Price breached the lower trendline which seems to invalidate the tringle that I assumed was forming. We currently have support holding on the .786 Fibonaccia level (light blue). Just under that is the weekly 200 MA (Purple sloped line) which gave us a strong bounce when it was hit in mid-December. The most recent long red wick down came about $20 shy of touching the 200 MA.
The notable volume decline (underneath the orange arrow) may suggest we are nearing a decision point regarding the next big move.
Option 1): Btc hits the 200 MA and goes into the mid-to-high 3,000's
Option2): Btc plunges through the 200 MA and tests the next levels of support around 3000.
I believe that if option 2 happens first, we are likely to see sub 3000 levels quite soon after.
1/30/19
Update:
Price breached the lower trendline which seems to invalidate the tringle that I assumed was forming. We currently have support holding on the .786 Fibonaccia level (light blue). Just under that is the weekly 200 MA (Purple sloped line) which gave us a strong bounce when it was hit in mid-December. The most recent long red wick down came about $20 shy of touching the 200 MA.
The notable volume decline (underneath the orange arrow) may suggest we are nearing a decision point regarding the next big move.
Option 1): Btc hits the 200 MA and goes into the mid-to-high 3,000's
Option2): Btc plunges through the 200 MA and tests the next levels of support around 3000.
I believe that if option 2 happens first, we are likely to see sub 3000 levels quite soon after.
Comment:
I would also like to clarify the purpose for me charting Bitcoin.
I have never owned or traded Bitcoin personally.
The purpose of me focusing on Btc is because it dictate the rest of the crypto market. When Btc crashes, so too does the rest of the market.
When Bitcoin surges upwards, Alts deliver incredible returns.
When Btc ranges ( remains in a price zone for a period of time), certain alts have the ability to deliver excellent returns as well.
Understanding where the market is headed is crucial in making trade decisions.
I have never owned or traded Bitcoin personally.
The purpose of me focusing on Btc is because it dictate the rest of the crypto market. When Btc crashes, so too does the rest of the market.
When Bitcoin surges upwards, Alts deliver incredible returns.
When Btc ranges ( remains in a price zone for a period of time), certain alts have the ability to deliver excellent returns as well.
Understanding where the market is headed is crucial in making trade decisions.
Comment:
Per my previous update, looks like BTC chose option 1:
After a daily candle close above the yellow diagonal resistance line, Btc is parked perfectly at its next resistance line which is the .236 Fibonacci retracement level.
Keeping it simple, if btc can break above this level and hold for a daily close, I would consider that short term bullish with a target of around 4400 or so. If it fails to break this .236 level and hold above it, the previous comments on this post may may actually be soon validated, favoring a higher time-frame bearish continuation.
In the meantime, this surge in Btc has allowed Alts room to run, as the major altcoins have been posting returns of anywhere from 10-35% in the past 2 days.
After a daily candle close above the yellow diagonal resistance line, Btc is parked perfectly at its next resistance line which is the .236 Fibonacci retracement level.
Keeping it simple, if btc can break above this level and hold for a daily close, I would consider that short term bullish with a target of around 4400 or so. If it fails to break this .236 level and hold above it, the previous comments on this post may may actually be soon validated, favoring a higher time-frame bearish continuation.
In the meantime, this surge in Btc has allowed Alts room to run, as the major altcoins have been posting returns of anywhere from 10-35% in the past 2 days.
Comment:
Very nice overnight dump taking out multiple Support & Resistance levels.
So far, the 100 day Moving Average and 26 EMA seem to be holding as temporary key support levels.
Leading up to this overnight price dump, the price action:volume profile did not look organic, as we saw Btc price rising and daily volume declining.
Whoever is controlling this market action may look to keep Btc price above the 3700 level to retain interest in the market for at least a few more days, otherwise down we go.
Many Altcoins are looking to capitalize on recently established momentum changes (based on significant moving averages). However, all Alt price movement is completely contingent on whatever Bitcoin does.
Leading up to this overnight price dump, the price action:volume profile did not look organic, as we saw Btc price rising and daily volume declining.
Whoever is controlling this market action may look to keep Btc price above the 3700 level to retain interest in the market for at least a few more days, otherwise down we go.
Many Altcoins are looking to capitalize on recently established momentum changes (based on significant moving averages). However, all Alt price movement is completely contingent on whatever Bitcoin does.
Comment:
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Hypothetical:
If I were a whale (Large entity with strong financial influence) looking to facilitate the market movements in my favor, I would probably look to incite a moderate pump coinciding with the bullish play-out of popular technical indicators (such as key moving averages). I would then look to pull the rug out from underneath the market rally, scaring off the remaining 'weak-handed' investors and also hopefully cleansing the market of unsustainable crypto tokens/projects. Dumping the market to one more major degree lower would allow me, and other major institutions, to accumulate the higher capped coins at cheaper valuations to hold for the long term. In the case of exchanges / token dealers, this would be one way to maximize profit potential.
This is just a hypothetical scenario, of course, but since this market is highly unregulated and at times appears to move based on no fundamentals whatsoever, or obscure/conflicting technicals, we really cannot say with certainty that a scenario like this is unrealistic.
If I were a whale (Large entity with strong financial influence) looking to facilitate the market movements in my favor, I would probably look to incite a moderate pump coinciding with the bullish play-out of popular technical indicators (such as key moving averages). I would then look to pull the rug out from underneath the market rally, scaring off the remaining 'weak-handed' investors and also hopefully cleansing the market of unsustainable crypto tokens/projects. Dumping the market to one more major degree lower would allow me, and other major institutions, to accumulate the higher capped coins at cheaper valuations to hold for the long term. In the case of exchanges / token dealers, this would be one way to maximize profit potential.
This is just a hypothetical scenario, of course, but since this market is highly unregulated and at times appears to move based on no fundamentals whatsoever, or obscure/conflicting technicals, we really cannot say with certainty that a scenario like this is unrealistic.
Comment:
Additionally, the last two times the 50 day moving average touched, and attempted to break and stay above the 100 day moving average (on a Daily resolution), the 100 day moving average acted as Resistance to the price of BTC.
This time, the 100 day moving average is acting as Support, as price has held above it for over two weeks now.
This time, the 100 day moving average is acting as Support, as price has held above it for over two weeks now.
Comment:
Perfect cue for a whale sighting:
This is one of the most brutally wicked (literally) hourly candle we've seen in a while, wiping out both long & short positions simultaneously. This kind of price action looks far from organic as total crypto market cap has hovered around $130-135 billion dollars for the past week or so, meaning there is not much money flowing in or out of the market on these moves. That implies that cash flow is cycling among traders which would explain why altcoins are individually delivering sizable returns independent of one another and in no particular order.
This is one of the most brutally wicked (literally) hourly candle we've seen in a while, wiping out both long & short positions simultaneously. This kind of price action looks far from organic as total crypto market cap has hovered around $130-135 billion dollars for the past week or so, meaning there is not much money flowing in or out of the market on these moves. That implies that cash flow is cycling among traders which would explain why altcoins are individually delivering sizable returns independent of one another and in no particular order.
Comment:
And here is the case for the market dumping soon:
As Btc tapped the upper diagonal resistance line, price, On Balance Volume, and RSI all began to curl over in tandem (although RSI is more difficult to see, it is following the direction of the arrows).
If Bitcoin were to obey the diagonal support and resistance lines, that would imply support around $3,500 or so, which is also where the 200 MA appears to be on the weekly chart.
As Btc tapped the upper diagonal resistance line, price, On Balance Volume, and RSI all began to curl over in tandem (although RSI is more difficult to see, it is following the direction of the arrows).
If Bitcoin were to obey the diagonal support and resistance lines, that would imply support around $3,500 or so, which is also where the 200 MA appears to be on the weekly chart.
Comment:
Approaching a strong resistance zone around 4,100.
Price has risen for 5 straight weeks now. The last two times that happened, price fell by 14% (May 2018), and 46% (Dec. 2017).
If price does fall going into next week, I am looking for support around 3,500 which seems to be an interesting area with reason to hold based on horizontal and trend line support, as well as the .618 Fibonacci level from the December 10th low.
Approaching a strong resistance zone around 4,100.
Price has risen for 5 straight weeks now. The last two times that happened, price fell by 14% (May 2018), and 46% (Dec. 2017).
If price does fall going into next week, I am looking for support around 3,500 which seems to be an interesting area with reason to hold based on horizontal and trend line support, as well as the .618 Fibonacci level from the December 10th low.
Comment:
Comment:
We now have a more solidified idea as to the structure of the triangle that has been forming for the last few weeks, as the ascending bottom line is actually slightly lower than previously noted in this original post. This would extend the apex out into the future by several days and in turn delay our expected due date of a breakout in either direction. The importance of a breakout from the apex of the triangle is that it would theoretically represent who has control: buyers or sellers. If the upper or lower line is breached with strong volume, we will have somewhat of an idea as to whether we should be short term bullish or bearish.