Here's a plan to start buying BTC gradually on a dollar cost basis without trying to time the market precisely.
BTC has historically moved in booms and busts with the max drawdown from the prior top being at most 95%.
This is the main reason I'm kind of expecting another leg down to the $1k to $2k region.
BTC has also always printed a long rejection wick to the downside on the weekly chart before moving higher. It has not yet done that in this bear market and in fact the most recent long rejection wick was to the upside which suggests more downside action.
BTC has also strongly responded to the Coppock Curve and in particular a cross above 50 after a long consolidation has been a great signal. It has not yet even crossed above 0 so that is not yet a signal to buy.
Last time BTC consolidated it also ended up making a highly symmetrical price action pattern with a mirror centering around May 14 2015, in the middle of the low volume trading season of the summer.
This gives the following checklist:
1.) Max drawdown 95% at $1k? - No
2.) Max drawdown 90% at $2k? - No
3.) One year Coppock Curve below 0? - Yes
4.) Coppock Curve above 50? - No
5.) Printed large downside rejection wick on week chart? (HIGHLY IMPORTANT) - No
6.) Symmetrical consolidation price action pattern? - No
Of all the things on the list I am most interested in seeing a strong downside rejection wick because that is a way to define a stop and also indicates a bottom is in. So long as it's continuing to find more volume to the downside it will be attracted to downside prices. A wick means no more volume to the downside and less reason to explore lower prices.
So I am not yet ready to dollar cost average on BTC and will continue to scalp and swing trade. I will keep this list updated every few weeks or months. The summer may prove to be the best buying area for BTC.
BTC has historically moved in booms and busts with the max drawdown from the prior top being at most 95%.
This is the main reason I'm kind of expecting another leg down to the $1k to $2k region.
BTC has also always printed a long rejection wick to the downside on the weekly chart before moving higher. It has not yet done that in this bear market and in fact the most recent long rejection wick was to the upside which suggests more downside action.
BTC has also strongly responded to the Coppock Curve and in particular a cross above 50 after a long consolidation has been a great signal. It has not yet even crossed above 0 so that is not yet a signal to buy.
Last time BTC consolidated it also ended up making a highly symmetrical price action pattern with a mirror centering around May 14 2015, in the middle of the low volume trading season of the summer.
This gives the following checklist:
1.) Max drawdown 95% at $1k? - No
2.) Max drawdown 90% at $2k? - No
3.) One year Coppock Curve below 0? - Yes
4.) Coppock Curve above 50? - No
5.) Printed large downside rejection wick on week chart? (HIGHLY IMPORTANT) - No
6.) Symmetrical consolidation price action pattern? - No
Of all the things on the list I am most interested in seeing a strong downside rejection wick because that is a way to define a stop and also indicates a bottom is in. So long as it's continuing to find more volume to the downside it will be attracted to downside prices. A wick means no more volume to the downside and less reason to explore lower prices.
So I am not yet ready to dollar cost average on BTC and will continue to scalp and swing trade. I will keep this list updated every few weeks or months. The summer may prove to be the best buying area for BTC.
Comment:
Here's the same chart using month bars. I am also interested in seeing a month chart print a rejection wick to the downside in order to start buying BTC for the long haul.
Comment:
The coppock curve is looking stronger. I might start dollar cost averaging in a small way within a month. I will still be looking for a downside wick for my main signal to buy heavier.
1.) Max drawdown 95% at $1k? - No
2.) Max drawdown 90% at $2k? - No
3.) One year Coppock Curve below 0? - Yes
4.) Coppock Curve above 50? - Almost!
5.) Printed large downside rejection wick on week chart? (HIGHLY IMPORTANT) - No
6.) Symmetrical consolidation price action pattern? - No
1.) Max drawdown 95% at $1k? - No
2.) Max drawdown 90% at $2k? - No
3.) One year Coppock Curve below 0? - Yes
4.) Coppock Curve above 50? - Almost!
5.) Printed large downside rejection wick on week chart? (HIGHLY IMPORTANT) - No
6.) Symmetrical consolidation price action pattern? - No
