Disclaimer: This article is not intended as an investment advice and published for educational purposes only. BTC markets are highly volatile and risky in nature. DYOR before making any investment decision rather than listening to a stranger over the Internet.
Outlook and Analysis
Bitcoin’s current price action is signaling that a bottom is already in or there could be one last sell off. Either way, it is close to establish the floor and mark the end of this painful, prolonged bear market. If the bottom is not already in and it breaks below the 200 MA on a weekly (Pink Line) – currently around $3,350 – the next support will be around 300 MA (Green Line) at $2,360 where the presence of 88.6% Fib also strengthens the level. When the market ends the downtrend, it does not mean that an uptrend will follow immediately, the price could range between $5,000 – $3,000 for several months before it breaks out of the range on the upside and gains momentum.
On the daily time frame, I have the resistance blocks highlighted in red. These are the major obstacles BTC must overcome to prove its resilience. The first block is $4,000-4,300 and BTC is currently trying to surpass it. A weekly close above $4,300 can push it to $6,000, with a minor resistance at $5,200. The VRPR analysis also shows a gap between $4,300 and $6,000. The second block ($5,800-6,100) is the critical resistance BTC has to smash to mark the end of the current downtrend.
The critical support and resistance levels are as follows:
Support:
61.8 % Fib: $3,548
200 Weekly MA and 78.6% Fib: $3,360
88.6% Fib: $3,249
300 Weekly MA and 88.6% Fib: $2,375
Resistance:
The red highlighted areas are the potential resistances, i.e., between $4,000 – 4,300 and $5,800 – $6,100.
A Fractal Analysis
Here is an MA crossover strategy that can be observed for a long-term trend reversal. The crossover is between 8EMA and 100MA on weekly time frames. This is a two-step process. First, the price should break the 100 MA followed by the 8 EMA crossover. In the chart below, 8 EMA is the orange trend line and 100 MA is the red line.
Why this fractal:
Even though I am not a big fan of fractals, they cannot be ignored completely. In Nov 2014, the price dipped below the 100 MA, followed by 8 EMA crossing below the latter. BTC trends below the 100 MA for almost a year before breaking above in Nov 2015 followed by the 8 EMA crossing the former above. If this fractal plays the same in 2019: the price is trending below 100 MA since Nov 2018 and 8 EMA has already crossed 100 MA to the downside. The price could stay below the 100 MA for an extended period before breaking above which could also mark the end of the current bear market. This fractal indicates that BTC will break above the 100 MA around Nov 2019. The crossover between the MAs will provide an additional buy signal for BTC and a potential end of the downtrend.
Conclusion
BTC is not going anywhere. Take that, haters. For a risk taker, a dollar cost averaging could be a good strategy to accumulate Bitcoin. For a risk-averse investor, waiting for trend reverse signals such as the above-mentioned MAs crossover could be a good point to start buying.
