However, there's still an open-ended matter to monitor from a follow-up comment, made on August 31: "Within 3-4 weeks, I expect the 200-day to fall under 8K. Meanwhile, Bitcoin could be pushing somewhere between 7.7K and 8K if it continues a path towards being overbought. This scenario may mark a crossroads for Bitcoin for the rest of 2018. Personally, I expect the next overbuy approach/arrival to coincide with a rejection at the 200-day . However, THAT MAY WEAKEN THE RESISTANCE AT 200-DAY , which could open a run past and above the line in the near future. This is pure speculation, but how does another December bull run sound?"
Now that we are in that 3-4 week range since that comment, let's do a proper follow-up:
- The 200-day is sitting just below 7.6K, working well within expectation.
- The daily did not reach or even approach "overbought" status, thanks to the sharp price decline on September 5.
- Bitcoin has yet to reach or approach the 200-day , but arrival will happen sooner than later.
Bitcoin has rested roughly 800-900 dollars below the 200-day for the past few days now. That means only one rally is enough to test the 200-day . Just look at the upcoming candles that will leave the 200-day range: March 9 ($9255.00), March 10 ($8795.44), March 11 ($9533.88), March 12 ($9120.00) and March 13 ($9145.41). That average closing price of that span is approx. $9169.95 (rounded to nearest cent). Let's compare that to 6.8K, which is a highly possible 5-day over the next week. This could drop the 200-day by $50-60 just within the next week, pushing it closer to 7.5K or lower. And better yet, because BTC didn't drop to 7K until March 29, the 200-day will drop even further over the successive two weeks, perhaps to 7.4K or lower. Compare this to the upper bound of my blue trendline channel, which currently sits at $7400.80 and moves up by approx. $9.26 per day. That means within three weeks, the upper bound would approach 7.6K or above.
A rough calculation gives us about a 2-3 week timeframe for the trendline channel to meet the 200-day . Even if Bitcoin doesn't rally, the current trend suggests that the 5-day will stay mostly within the trendline channel. In the past month, the 5-day briefly escaped the channel three times, but resistance quickly pushed it back inside the channel in each instance.
This means we are soon closing in on Bitcoin's 200-day . A crossover above the moving average obviously makes for great news, and a bull run would likely follow. A bounce-back below the moving average means that Bitcoin still has work left to do. I wouldn't call it a completely signal, though. As mentioned in the earlier quote, resistance at the 200-day could be weakened in this case, and that may open up a bull run after the NEXT arrival at the moving average.
For those getting impatient by the steady price action of Bitcoin in the past few months, find comfort in the reality that major moves will soon be made by Bitcoin , for better or worse. And when that happens, get ready to BUY or SELL.