Sometimes analysis can become overly complicated and stepping back a little and broadening the time frames can help bring back some clarity to what might otherwise be a confusing set of circumstances. Such could be the case when we look at the weekly chart of BTC and the 20 week moving average.
The 20 week MA has exerted its influence over BTC for years and this can be seen in the above chart, first as support and then as resistance, as the price continuously comes back to test it. BTC cross the 20 week MA in mid-March, 2019, but has yet to come back to test it. Could BTC be seeking it out again, now?
I think so and there is the possibility of an ABC correction being in play right now, where the price might overshoot the 20 week MA to target $8,565, before commencing another substantial rally.
Alternatively, BTC could come back to test the 20 week MA and before rebounding in a shorter rally.
Of the two scenarios, the first would be much healthier for the prospects of BTC and would provide a very nice and convincing entry point.
The 20 week MA has exerted its influence over BTC for years and this can be seen in the above chart, first as support and then as resistance, as the price continuously comes back to test it. BTC cross the 20 week MA in mid-March, 2019, but has yet to come back to test it. Could BTC be seeking it out again, now?
I think so and there is the possibility of an ABC correction being in play right now, where the price might overshoot the 20 week MA to target $8,565, before commencing another substantial rally.
Alternatively, BTC could come back to test the 20 week MA and before rebounding in a shorter rally.
Of the two scenarios, the first would be much healthier for the prospects of BTC and would provide a very nice and convincing entry point.
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This would be a slight over-reach of the 0.618 projection level but could be a legitimate bottom of the correction, fulfilling the technical requirements of the ABC pattern, retesting the support level from mid-July and acknowledging and testing the 20 week MA. However, I still feel that $8525 may still be calling BTC lower, as this level hasn't really been confirmed as support since it formed a point of resistance back in July. Also the weekly MACD has only just crossed bearish, so one could expect a little bit of bearish momentum to carry price lower for longer. But I am still looking at the 20 week MA to put the breaks on any continuation of such a decline.