This is an update to my last long-term analysis from 09/2020.
The current update won't be as heavy on technicals seeing as we move into the next phase of price exploration.
Let's take a quick look at the big picture:
The obvious implication here being the bullish chart with HH & HL and ATH breakout. Apart from that it's interesting to note that we made new ATH sooner, compared to the last cycle. I will come back to the cyclic comparison on the 1W below.
Chart says it all basically. This still looks bullish af. Quick things to point out:
- Tight consolidation near 2017 highs preceded the breakout, this was a clue about current state of supply/demand.
- Last week was a strong move at 3x weekly ATR, closing near the highs.
- Volume & PA showing no signs of distribution.
I said I wanted to revisit the cyclical comparison:
If time is linear we would expect to be at the cyan circle in the chart. And fair enough, as a simple heuristic. I would argue though that structurally we're looking more similar to the 03/2017 extension that led to the interim top in 06/2017. By structurally I mean taking out the old ATH, but also the slope of the current swing, which looks almost identical to the mentioned move from 03/2017.
Of course in the final analysis these are just rough comparisons with little predictive value as actual trading opportunities are concerned.
I still find it interesting. Why? I've been following BTC for 3.5 years now, and I remember a lot of theorizing by the pundits about how the halving/price cycle would take longer with time. Maybe what we are seeing signs of is the opposite: A shortening of the cycle (especially given the fact that BTC too had to stomach the massive pandemic induced sell-off in Q1/2020).
A shortening of the cycle somehow seems logical to me from a market psychology viewpoint: As more people learn about BTC and its inherent cyclical nature we see normal human tendencies of FOMO and thus front-running, thus speeding up. The possible implications of that being that either:
- the next top comes in a bit earlier, say QIII/2021, or
- we still get a run pretty much until EOY 2021, again extending considerably beyond S2F (stock to flow) targets, which could put the next top in the region of ~150k, which I know sounds nuts.
A final small side note re the cycle comparison: Even if we were to assume us already being closer to 06/2017 than 12/2016, after that BTC still did a 6x. A similar move in relative terms puts us pretty much bang-on at the S2F target 🔮
All of this of course is highly speculative with little value for actual trades, but I still find it an interesting yardstick to weigh current PA against. At the very least we can derive some clear markers where we would have to throw out our expectations for 2021 moonshot.
In terms of technicals I'm watching these simple things for now, which present the next obvious buying opportunities, but if violated would throw up red flags for me:
- What happens around the 2017 ATH breakout level. I fully expect a re-test now that we have seen such an extended run, probably dipping back below 20k. But we shouldn't take long to reclaim.
- Price relative to 20W EMA. While a pullback towards it would be a great BTD opportunity, a close below would put me into alert mode
It's classic BTC to give everybody waiting for the nice deep pullbacks the finger. My hopes of longing 13.8k or at least 15.5k too were disappointed. I think the chance of seeing those levels has pretty much all but sailed, 15.5k might still happen, but it has to be soon™️.
Otherwise this is the next buying opportunity that interests me (and the last chart for today):
A couple of technicals (2017 ATH, flip in polarity, upper boundary of HTF channel we broke out of below) line up nicely with the recent gap on CME futures.
As always, please do your own analysis, and take trades only in accord with your own trading plan and risk parameters. Good luck! 🚀
The current update won't be as heavy on technicals seeing as we move into the next phase of price exploration.
Let's take a quick look at the big picture:
The obvious implication here being the bullish chart with HH & HL and ATH breakout. Apart from that it's interesting to note that we made new ATH sooner, compared to the last cycle. I will come back to the cyclic comparison on the 1W below.
Chart says it all basically. This still looks bullish af. Quick things to point out:
- Tight consolidation near 2017 highs preceded the breakout, this was a clue about current state of supply/demand.
- Last week was a strong move at 3x weekly ATR, closing near the highs.
- Volume & PA showing no signs of distribution.
I said I wanted to revisit the cyclical comparison:
If time is linear we would expect to be at the cyan circle in the chart. And fair enough, as a simple heuristic. I would argue though that structurally we're looking more similar to the 03/2017 extension that led to the interim top in 06/2017. By structurally I mean taking out the old ATH, but also the slope of the current swing, which looks almost identical to the mentioned move from 03/2017.
Of course in the final analysis these are just rough comparisons with little predictive value as actual trading opportunities are concerned.
I still find it interesting. Why? I've been following BTC for 3.5 years now, and I remember a lot of theorizing by the pundits about how the halving/price cycle would take longer with time. Maybe what we are seeing signs of is the opposite: A shortening of the cycle (especially given the fact that BTC too had to stomach the massive pandemic induced sell-off in Q1/2020).
A shortening of the cycle somehow seems logical to me from a market psychology viewpoint: As more people learn about BTC and its inherent cyclical nature we see normal human tendencies of FOMO and thus front-running, thus speeding up. The possible implications of that being that either:
- the next top comes in a bit earlier, say QIII/2021, or
- we still get a run pretty much until EOY 2021, again extending considerably beyond S2F (stock to flow) targets, which could put the next top in the region of ~150k, which I know sounds nuts.
A final small side note re the cycle comparison: Even if we were to assume us already being closer to 06/2017 than 12/2016, after that BTC still did a 6x. A similar move in relative terms puts us pretty much bang-on at the S2F target 🔮
All of this of course is highly speculative with little value for actual trades, but I still find it an interesting yardstick to weigh current PA against. At the very least we can derive some clear markers where we would have to throw out our expectations for 2021 moonshot.
In terms of technicals I'm watching these simple things for now, which present the next obvious buying opportunities, but if violated would throw up red flags for me:
- What happens around the 2017 ATH breakout level. I fully expect a re-test now that we have seen such an extended run, probably dipping back below 20k. But we shouldn't take long to reclaim.
- Price relative to 20W EMA. While a pullback towards it would be a great BTD opportunity, a close below would put me into alert mode
It's classic BTC to give everybody waiting for the nice deep pullbacks the finger. My hopes of longing 13.8k or at least 15.5k too were disappointed. I think the chance of seeing those levels has pretty much all but sailed, 15.5k might still happen, but it has to be soon™️.
Otherwise this is the next buying opportunity that interests me (and the last chart for today):
A couple of technicals (2017 ATH, flip in polarity, upper boundary of HTF channel we broke out of below) line up nicely with the recent gap on CME futures.
As always, please do your own analysis, and take trades only in accord with your own trading plan and risk parameters. Good luck! 🚀
