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Friday, August 21, 2020

BITCOIN The underlying trend-line comes into play again..

BITCOIN The underlying trend-line comes into play again..

Bitcoin / U.S. dollar BITSTAMP:BTCUSD

Do you remember the following two ideas posted in mid July and mid June respectively?

BITCOIN The most consistent trend-line since March.

BITCOIN Is this trend-line setting up the tempo?

Those where about the "Underlying Trend-line" that dominates the price action and sets up the temp since March. As you see its role as a Pivot Point has worked perfectly and has helped us identify consolidation phases and break-outs.

** The Fibonacci Channel **
At the moment I see new possibilities and have to update the pattern, changing it slightly as I make use of the Fibonacci Channel on the logarithmic scale. As you see, Bitcoin is trading since July 27, within the 0.618 and 1.000 level of the Fibonacci Channel. This is similar to the April 29 - June 01 sequence. What followed was a slow pull-back phase to the 0.5 - 0.382 Fibonacci range, which gave rise to the next rally. I have analyzed these fractal similarities on the ideas below:

BITCOIN Can it go to $12350 on this fractal?

BITCOIN $12350 Target hit. Remember this fractal?

** New perspective **
A pull-back to the 0.5 Fibonacci level seems more likely now than further uptrend, but we have to consider another scenario moving forward. That is the possibility that the current sequence is repeating the March 20 - April 7 price action. That was also almost a triple top (on the 0.5 Fib then), but instead of pulling back, it rose rapidly to the 1.0 Fib level. If this is repeated a 0.5 extension on top of the 1.0 is 1.5, which right now is around $16500. Now that would be of course too high, too strong and too soon and Bitcoin would need an outside catalyst (such as the March economic stimulus package which catapulted stocks and cryptos alike).

So again it appears that a relief action in the form of a pull back is right now what seems more likely and what will give us another opportunity to accumulate BTC .

Which scenario do you think Bitcoin will follow? Feel free to share your work and let me know in the comments section!

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