Happy Sunday, here I give you another perspective that may support my previous bearish bias of bitcoin.
The key of this analysis is the high period of moving average which I use to identify whether there is a down trend or the uptrend which hold current major trend in the market. Here in this example, I use the 1000 moving average on the daily time frame.
The 1000 moving average can be used as the benchmark to identify the dynamic support or resistance. In this current structure, we've found that based on the historical performance of bitcoin, there are only 3 period of times that the price trended below this 1000 MA on daily chart. The first period was between January - October 2015, The second period was between November 2018 - April 2019 and the third period is now. I might say with current price structure, the 1000 MA is acting as a dynamic resistance and the fact that the price is coming closer to this line makes me expecting a potential rejection toward this resistance and make the price goes lower.
On the other hand, The fact that the price is now trending slightly below the 1000 moving average is once again becoming a good area of doing the dollar cost averaging for a long term investment. At this rate below this dynamic support, the price of bitcoin is becoming undervalue. But, this doesn't mean the price can't goes even lower, but doing the dollar cost averaging at this rate is less risky than if we wait for the price to breaks out of current resistance to confirm the uptrend.
So, for short term, I will bet that the price will go even lower. But, for longer term maybe for the next 2 - 5 years, this time is a great time to start your dollar cost averaging on bitcoin as part of your portfolio.
The key of this analysis is the high period of moving average which I use to identify whether there is a down trend or the uptrend which hold current major trend in the market. Here in this example, I use the 1000 moving average on the daily time frame.
The 1000 moving average can be used as the benchmark to identify the dynamic support or resistance. In this current structure, we've found that based on the historical performance of bitcoin, there are only 3 period of times that the price trended below this 1000 MA on daily chart. The first period was between January - October 2015, The second period was between November 2018 - April 2019 and the third period is now. I might say with current price structure, the 1000 MA is acting as a dynamic resistance and the fact that the price is coming closer to this line makes me expecting a potential rejection toward this resistance and make the price goes lower.
On the other hand, The fact that the price is now trending slightly below the 1000 moving average is once again becoming a good area of doing the dollar cost averaging for a long term investment. At this rate below this dynamic support, the price of bitcoin is becoming undervalue. But, this doesn't mean the price can't goes even lower, but doing the dollar cost averaging at this rate is less risky than if we wait for the price to breaks out of current resistance to confirm the uptrend.
So, for short term, I will bet that the price will go even lower. But, for longer term maybe for the next 2 - 5 years, this time is a great time to start your dollar cost averaging on bitcoin as part of your portfolio.
