Perhaps the biggest development this week for Bitcoin (BTCUSD) has been the clear rejection exactly on the 4H MA200 (orange trend-line). Typically when that takes place during an uptrend, it favors more the dominant (bearish) trend than prepares a switch to a bullish reversal. But let's see how similar patterns have developed price actions in recent cases going as far back as the 2018 Bear Cycle bottom.
First I need to make clear that the RSI indicator on the panes below the chart is on the 1D time-frame and not the 4H. First case is the December 2021 pattern, which as you see had also a clear 4H MA200 rejection, then a marginal break above but that wasn't enough with the price extending the bearish trend all the way to 33000 before stabilizing.
In June 2021 the price broke almost 2k above the 4H MA200 before being rejected to make a marginally Lower Low than the one that led to the 4H MA200 and then stabilize and gradually prepare a strong Bull run to a new All Time High.
Now going back to the December 2018 Bear Cycle Bottom, the 4H MA200 test came just 5 days later with the price clearly breaking above the 4H MA200 but as with the previous cases, dropping back below the 4H MA50 (blue trend-line). This time however it didn't make a Lower Low, holding the December bottom which gradually gave way to the accumulation that paved the way for the May - June rally.
Notice how on all cases, the 1D RSI printed the same pattern. And practically it was only when BTC broke above the 1D MA50 (red trend-line) that a recovery was established (though in the case of 2021 didn't last for long, even though it made Higher Highs). The 1D MA50 is currently at 34390.
What do you think? Do you expect Bitcoin to make one last push lower based on this model? Or reverse to a bullish trend if the 1D MA50 breaks first? Feel free to share your work and let me know in the comments section below!
Thx for the analysis, very clear to me. A last dip to the 20k seems inevitable. Thx again and keep up the good work. !!
bluesilver3
⋅
I should also add that if you are ‘trading’ without leverage then at these prices, trying to catch a bottom isn’t necessary. I’ve started averaging in from 30k on bitcoin and alts too that have a solid business plan. If there is a last drop it’s not necessary to use leverage or take risks. It could be sudden and costly when there is enough to gain on the upside without that risk.
MsMetamorphosis369
⋅
@bluesilver3 100% agree! I literally JUST explained that to a client 20mins ago then see your comment lol.
bluesilver3
⋅
I have been expecting a last fifth wave down. I don’t believe it will go as low as many expect but it will conclude this correction. I suspect it to have a final drop, divergence on the daily RSI and then resume the bullish trend. Thanks for sharing this comparison
vzik665
⋅
we've been high too long, we go down.
jpbrown1023
⋅
Great post!
DeGRAM
⋅
Thank you for sharing. Great
AlkalineFX
⋅
Love it!
mastershark
⋅
💯💯💯
rogm86
⋅
glad you pointed out that chart pattern. It seems to always happen after a big fall. Seen it a number of times in the past year. More then likely due to people recovering some of their losses from the fall.
Thx again and keep up the good work. !!