The Cycles Of Bitcoin - Get Ready!
Updated
At the very beginning of 2013, I started investing in Bitcoin. My approach to accumulation is Dollar Cost Averaging ( DCA ). I am a very big believer in the mental aspect of accumulation. This means that if I am utilizing DCA because I am extremely long on Bitcoin, I would like to DCA when the price is down - at least for the short term. It is the essence of "Buy The Dip". It does create great trading potential, however, I do not Buy The Dip because I want to trade.
There are 5 things that I use in technical analysis in finding the best possible area to accumulate in the short term. They are:
1. Key support & resistance areas found within the .618 - .786 channel on Fibonacci Retracement
2. Breakout targets on both the downside & upside utilizing traditional patterns like triangles and wedges
3. The confluence of 50EMA & 200EMA on daily charts with the above 2 indicators
4. The combination of slower momentum oscillators & faster moving - - i.e. RSI & Stoch RSI
5. Lastly - which some disagree with - is the historical data that we have on Bitcoin in terms of the flow and movements of BTC.
For the purpose of transparency, throughout the year I did not think that BTC would break below 5k. This is also why I mentioned on videos throughout the year that $3,500 - $5,500 area is an extremely great price to accumulate in my opinion.
The purpose of explaining all of this is because it is the foundation of what you see on the screen.
Long term there are some more things that play into the movement of Bitcoin:
Bitcoin thus far has followed a pattern of 3 Events:
1. Halving - The amount of brand new mined BTC is cut in half for miners. Also, the price earned for mining 1 BTC is also cut in half.
2. All Time High - 1 Year after the halving you see BTC reaching a new ATH
3. After ATH is reached, you see consolidation and sell-off in BTC price. This is the correction phase.
Each cycle is highlighted on the chart. Both past and SPECULATIVE present. You will see a steady decrease in % gains in each cycle. This is normal.
Important to note: You will also see the key area of .786 on the Fibonacci retracement (red lines) plays a crucial role in defining the bottom range.
None of this takes into account the synergistic position and momentum within the weekly RSI
There are 5 things that I use in technical analysis in finding the best possible area to accumulate in the short term. They are:
1. Key support & resistance areas found within the .618 - .786 channel on Fibonacci Retracement
2. Breakout targets on both the downside & upside utilizing traditional patterns like triangles and wedges
3. The confluence of 50EMA & 200EMA on daily charts with the above 2 indicators
4. The combination of slower momentum oscillators & faster moving - - i.e. RSI & Stoch RSI
5. Lastly - which some disagree with - is the historical data that we have on Bitcoin in terms of the flow and movements of BTC.
For the purpose of transparency, throughout the year I did not think that BTC would break below 5k. This is also why I mentioned on videos throughout the year that $3,500 - $5,500 area is an extremely great price to accumulate in my opinion.
The purpose of explaining all of this is because it is the foundation of what you see on the screen.
Long term there are some more things that play into the movement of Bitcoin:
Bitcoin thus far has followed a pattern of 3 Events:
1. Halving - The amount of brand new mined BTC is cut in half for miners. Also, the price earned for mining 1 BTC is also cut in half.
2. All Time High - 1 Year after the halving you see BTC reaching a new ATH
3. After ATH is reached, you see consolidation and sell-off in BTC price. This is the correction phase.
Each cycle is highlighted on the chart. Both past and SPECULATIVE present. You will see a steady decrease in % gains in each cycle. This is normal.
Important to note: You will also see the key area of .786 on the Fibonacci retracement (red lines) plays a crucial role in defining the bottom range.
None of this takes into account the synergistic position and momentum within the weekly RSI
Trade active
~15 Months since posted this AnalysisWe are just over 20 days out until the Bitcoin Halvening! Even though we fell below my rough trend line we didn't violate the long term/ entire history of BTC exponential curve.
The price Target of 90K is still valid and highly probable. Given the weakened state of the world economy, the 90K target could be topped when looking at Stock/Flow modeling (Souce below) Historically Bitcoin overreacts to extreme highs and lows.
For instance the fair value of bitcoin 7500-8500. Once the Halvening occurs fair value will be at $88,400 July 23, 2020. And May 12, 2021, the fair value will be $94,100. Historically we've seen bitcoin over, and undershoot its fair value in the past bull and bear markets by 3-7 times fair value. So bitcoin hitting 150,000 - 600,000 for a short period of time is possible. Just like in December 2017 where we reached the fair value of ~$8000 then rallied in a very short period of time to $20,000 (which is a 2.5X deviation from fair value) And then on the other side in late December 2018 around when I made this model public. We hit sub $3000 levels; Fair value was $7000 which is roughly a 2.25X deviation from the Stock-to-Flow fair value.
Outlook
To sum it all up, our outlook remains unchanged and as we move into the Halvening fundamentals have never been stronger. During May, early June 2021 bitcoin should be priced between $84,000-180,000. However, we still recommend taking profits before the top and not trying to time it, this model is a rough guide and resource not a definitive prediction.
How I'm playing the Market and Bitcoin
Personally I will continue Dollar-cost averaging Bitcoin up until the old ATH ~$20,000 and I'll start selling as we move higher starting at ~40,000 dollar levels and continue to do so until bitcoin tops 80,000 and I'll hold a much smaller position ready to short Bitcoin on the way down until we fall back to the $25,000 level. I'll leave a link to the exchange I use to leverage trade bitcoin below. Remember Bulls make money, Bears make money and pigs get slaughtered, don't get greedy. Keep Collecting Crypto! As always, until next time!
I Use Bybit to leverage trade crypto fast and easy signup, they are reliable safe and secure. When you sign up with this link you will get a trading bonus! -
cryptomavs.com/bybit-bonus
_________________________________________________
Josh Miller
Co-Founder and CEO of Crypto Mavericks
To your Success
Connect with me on Instagram at- instagram.com/joshmillermindset
_________________________________________________
References
Bitcoin Stock to Flow Explanation & interactive popularized by PlanB
digitalik.net/btc/
Bitcoin Halvening rough countdown, it's estimated as bitcoin new supply will be cut in half at a certain block number but this will be very close to correct -
buybitcoinworldwide.com/bitcoin-clock/
Note
on track to hit $90-100K. Expect large pullbacks along the way, but we are solidly in a bull cycle!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.