Bitcoin is being difficult as always. Yet, despite its sudden twists and turns, we've called every major reversal thus far since the April peak.
Naturally, technical analysis is all based on probabilities. We don't KNOW where the price is going. The best thing we can do is to produce the most likely case and then add onto it as more pieces of the technical puzzle are being laid in our favor.
Now, is Bitcoin bound for the low $20 000s to complete its high likelihood zigzag? ...
... Is it range bound here for some time to follow? ...
... or is it ready for new all-time highs?
Normally, these are simple questions with difficult answers - that is, difficult if you restrict yourself to the Bitcoin chart only.
What then do I mean by that? Well, lo and behold, for I hereby present to you technical proof of when we can know for certain whether Bitcoin is ready for new all-time highs. Here's how ...
Marathon Digital Holdings, Riot and Hut 8 are all Bitcoin mining companies, whose respective stock developments are in direct relation to that of Bitcoin's spot price. We will therefore take a look at Marathon versus that of Bitcoin!
To access this chart, please enter: NASDAQ:MARA/BITSTAMP:BTCUSD in the search box up to your left.
Literally, what this shows is the internal strength relations between the Marathon stock and Bitcoin's spot price.
This chart is on the weekly:
What first meets the eye is a big reversed head and shoulders formation at which we've been rejected no less than four times by the neck line.
On top of that, we have a clear sideways range of which the upper resistance is the same as the H&S neck line.
Now, if you were to have bought Marathon instead of Bitcoin in April last year, you would have had 1 650% more profits. That's how significantly Marathon has rallied amidst Bitcoin's bullish run.
But what then is the deal with all of this? Reversed head and shoulders, a sideways range ... sure, we get it! Now what?
At first glance this may seem irrelevant. But once we dig deep, it in fact holds all the answers we need.
If Bitcoin were to begin trending in a truly bullish fashion, we can safely expect Marathon to vastly outperform Bitcoin's spot price. This would mean that we'd eventually see a technical outbreak both from the sideways range AND the reversed head and shoulders pattern. And given how strong this level of resistance has been historically (and equally so as support at the very beginning) we can expect a violent move once the price breaks! For the more times a support or resistance is being tested, the stronger a reaction is to be technically expected.
Given that Marathon won't rally unless Bitcoin does, and given the pent up powers that will be released upon a technical breakout between Marathon versus Bitcoin, unless it results in a fakeout, we can safely anticipate Marathon to outperform that of Bitcoin by around 280-350%.
This means that if Bitcoin were to quadruple from here, as in reaching $170 000, we can expect Marathon to ultimately amount to $500-600.
If, on the other hand, Bitcoin were to roll over and lose its bulls versus bears gatekeeper support between $41,000-42,700 (as discussed in detail previously here on TradingView) then we can safely expect Marathon to further under perform versus that of Bitcoin. In such case, a retest of the diagonal line would be a likely indication of Bitcoin having bottomed out. This would be THE ideal place to ladder in longs. If that diagonal support were to break, then the next level of support is the horizontal one, at a -50% under performance for Marathon. If that one breaks, then we have a long standing bear market on our hands.
I will base every Bitcoin decision from here on on this very chart.
I hope this has helped you bring full clarity to Bitcoin and how and when we'll know whether it's ready for new all-time highs.
All the best,
LLT
Naturally, technical analysis is all based on probabilities. We don't KNOW where the price is going. The best thing we can do is to produce the most likely case and then add onto it as more pieces of the technical puzzle are being laid in our favor.
Now, is Bitcoin bound for the low $20 000s to complete its high likelihood zigzag? ...
... Is it range bound here for some time to follow? ...
... or is it ready for new all-time highs?
Normally, these are simple questions with difficult answers - that is, difficult if you restrict yourself to the Bitcoin chart only.
What then do I mean by that? Well, lo and behold, for I hereby present to you technical proof of when we can know for certain whether Bitcoin is ready for new all-time highs. Here's how ...
Marathon Digital Holdings, Riot and Hut 8 are all Bitcoin mining companies, whose respective stock developments are in direct relation to that of Bitcoin's spot price. We will therefore take a look at Marathon versus that of Bitcoin!
To access this chart, please enter: NASDAQ:MARA/BITSTAMP:BTCUSD in the search box up to your left.
Literally, what this shows is the internal strength relations between the Marathon stock and Bitcoin's spot price.
This chart is on the weekly:
What first meets the eye is a big reversed head and shoulders formation at which we've been rejected no less than four times by the neck line.
On top of that, we have a clear sideways range of which the upper resistance is the same as the H&S neck line.
Now, if you were to have bought Marathon instead of Bitcoin in April last year, you would have had 1 650% more profits. That's how significantly Marathon has rallied amidst Bitcoin's bullish run.
But what then is the deal with all of this? Reversed head and shoulders, a sideways range ... sure, we get it! Now what?
At first glance this may seem irrelevant. But once we dig deep, it in fact holds all the answers we need.
If Bitcoin were to begin trending in a truly bullish fashion, we can safely expect Marathon to vastly outperform Bitcoin's spot price. This would mean that we'd eventually see a technical outbreak both from the sideways range AND the reversed head and shoulders pattern. And given how strong this level of resistance has been historically (and equally so as support at the very beginning) we can expect a violent move once the price breaks! For the more times a support or resistance is being tested, the stronger a reaction is to be technically expected.
Given that Marathon won't rally unless Bitcoin does, and given the pent up powers that will be released upon a technical breakout between Marathon versus Bitcoin, unless it results in a fakeout, we can safely anticipate Marathon to outperform that of Bitcoin by around 280-350%.
This means that if Bitcoin were to quadruple from here, as in reaching $170 000, we can expect Marathon to ultimately amount to $500-600.
If, on the other hand, Bitcoin were to roll over and lose its bulls versus bears gatekeeper support between $41,000-42,700 (as discussed in detail previously here on TradingView) then we can safely expect Marathon to further under perform versus that of Bitcoin. In such case, a retest of the diagonal line would be a likely indication of Bitcoin having bottomed out. This would be THE ideal place to ladder in longs. If that diagonal support were to break, then the next level of support is the horizontal one, at a -50% under performance for Marathon. If that one breaks, then we have a long standing bear market on our hands.
I will base every Bitcoin decision from here on on this very chart.
I hope this has helped you bring full clarity to Bitcoin and how and when we'll know whether it's ready for new all-time highs.
All the best,
LLT