Trading Bitcoin in a Parabolic Curve - Possible $30,000 Top
Updated
First off, I'd like to shout out a fellow trading view analyst filbfilb who predicted with high accuracy a $20,000 top and a regression to the mean of $3,000 in December of 2017 by using a similar style chart of analyzing a parabolic curve on Bitcoin.
I'm taking his concept and applying it to the current trend and 2019.
There are so many macroeconomic events that are creating a bullish vaccum for Bitcoin right now:
- Weakening world fiat currencies
- Trade tensions
- Federal Reserve Interest Rates
- S&P500 looking toppy.
- Economic sanctions.
- Yield curves on bonds moving upwards.
From the parabolic chart, it appears that we are currently breaking out of the Base 3, which is one of the fastest acceleration points for an asset.
In 2017, we saw multiple 40% corrections in Bitcoin during its ascent to $20,000, but for 2019, we haven't had a single correction over 30% so far.
This can be attributed to a lot of reasons, but a parabolic trend is where there are no sellers left as price rises due to supply/demand and it creates a vacuum where there is only buying pressure.
You will see slight profit taking at different levels as each person/institution will have a set target range for them to exit an asset, but new buyers will typically step in.
Based on Google trends, there is barely an uptick in retail interest so far, which means that this is being driven by institutional interest and not so much retail.
I derived $30,000 top from my Fibonacci levels that I created over a year ago, which lines up with the 29.034 Canfield Fibonacci level. I had previously been anticipating a cycle high at the 46.979 fibonacci level at $52,000, which may be the cycle top.
So to be clear, I am not claiming that $30,000 will be the cycle top for now, but will be a strong resistance level where we should see some strong profit taking and a potential parabolic break to the downside towards the .618 fibonacci retracement level around $13,500.
If you don't remember those fibonacci zones, I derived them from the following equations beyond the 4.23 to track long term assets in an uptrend.
• 6.854 = Any number in the sequence / 3rd number prior in the sequence
• 11.090 = 1.6185 = Any Number / 4th number prior in the sequence
• 17.944 = 1.6186 = Any Number / 5th number prior in in the sequence
• 29.034 = 1.6187 = Any number /6th number prior in the sequence
• 46.979 = 1.6188 = Any number / 7th number prior in the sequence
• 76.013 = 1.6189 = Any number / 8th number prior in the sequence
• 122.992 = 1.61810 = Any number / 9th 2.88% number prior in the sequence.
This also coincides with an intermediate cycle top that corresponds to Positive Crypto's golden ratio multilpier as well that Crypto Hamster took and made into an indicator on Trading View (just search Golden Multipler)
Strategy:
Ideally, you stay in a long position until the trend breaks and if you are looking to short, I would do it with 1X at the resistance levels outlined above to create a 'synthetic cash' position to hedge yourself with a stop loss above each resistance point. RESISTANCE ZONES: $16,800 and $28000-$30000.
Let me know what you think of my work and if you want to support me, give this idea a like and leave a comment below.
Thanks!
I'm taking his concept and applying it to the current trend and 2019.
There are so many macroeconomic events that are creating a bullish vaccum for Bitcoin right now:
- Weakening world fiat currencies
- Trade tensions
- Federal Reserve Interest Rates
- S&P500 looking toppy.
- Economic sanctions.
- Yield curves on bonds moving upwards.
From the parabolic chart, it appears that we are currently breaking out of the Base 3, which is one of the fastest acceleration points for an asset.
In 2017, we saw multiple 40% corrections in Bitcoin during its ascent to $20,000, but for 2019, we haven't had a single correction over 30% so far.
This can be attributed to a lot of reasons, but a parabolic trend is where there are no sellers left as price rises due to supply/demand and it creates a vacuum where there is only buying pressure.
You will see slight profit taking at different levels as each person/institution will have a set target range for them to exit an asset, but new buyers will typically step in.
Based on Google trends, there is barely an uptick in retail interest so far, which means that this is being driven by institutional interest and not so much retail.
I derived $30,000 top from my Fibonacci levels that I created over a year ago, which lines up with the 29.034 Canfield Fibonacci level. I had previously been anticipating a cycle high at the 46.979 fibonacci level at $52,000, which may be the cycle top.
So to be clear, I am not claiming that $30,000 will be the cycle top for now, but will be a strong resistance level where we should see some strong profit taking and a potential parabolic break to the downside towards the .618 fibonacci retracement level around $13,500.
If you don't remember those fibonacci zones, I derived them from the following equations beyond the 4.23 to track long term assets in an uptrend.
• 6.854 = Any number in the sequence / 3rd number prior in the sequence
• 11.090 = 1.6185 = Any Number / 4th number prior in the sequence
• 17.944 = 1.6186 = Any Number / 5th number prior in in the sequence
• 29.034 = 1.6187 = Any number /6th number prior in the sequence
• 46.979 = 1.6188 = Any number / 7th number prior in the sequence
• 76.013 = 1.6189 = Any number / 8th number prior in the sequence
• 122.992 = 1.61810 = Any number / 9th 2.88% number prior in the sequence.
This also coincides with an intermediate cycle top that corresponds to Positive Crypto's golden ratio multilpier as well that Crypto Hamster took and made into an indicator on Trading View (just search Golden Multipler)
Strategy:
Ideally, you stay in a long position until the trend breaks and if you are looking to short, I would do it with 1X at the resistance levels outlined above to create a 'synthetic cash' position to hedge yourself with a stop loss above each resistance point. RESISTANCE ZONES: $16,800 and $28000-$30000.
Let me know what you think of my work and if you want to support me, give this idea a like and leave a comment below.
Thanks!
Note
Cautionary Update:Although I believe that $30,000 is the high side target, it does not mean we will not experience a correction at some point.
First off, lets start with low time frame.
As we can see, we've got a bit of a rising wedge forming with a bearish div on the hourly RSI. These have typically been breaking up and we see alts get another kick in the teeth, but we are currently facing the .618 resistance level from the weekly fibonacci zone. These levels do not break easily and Bitcoin has a history of selling off around and near these levels.
This rally has a LOT of strength though, so it will most likely continue upwards, but we want to be aware of ALL possible scenarios.
Let's take a look at the history to understand this a bit better.
Looking at previous cycles in Bitcoin, we usually see a significant retrace from either the .618 or the 70.6 zone.
It is also possible that we push all of the way to the .786 fibonacci level before seeing a correction, but we want to make sure we do not get caught up in the euphoria and forget to lock in profits from an epic two week rally.
Let's take a quick look at bitcoin's history to know where we are:
The very first parabolic rally on Bitcoin from $5 to $16.50 saw a sell off and recovery but found resistance at exactly the .236 level for a 26% drop in value.
NEXT RALLY:
In 2013, we saw Bitcoin rise to $260 and fall back down to $70 before eventually regaining its parabolic trend.
It found resistance at the 70.6% fibonacci level and subsequently fell 23%.
NEXT
In 2014-2016 rally, we saw Bitcoin go on a parabolic move to the .618 level before a prompt rejection back down to the .382 for a 30% drop, following one more subsequent drop to the 200MA.
That rally is most closely related to the 2019 rally that we are facing now in terms of its parabolic nature.
We are currently in a prabolic curve rally and there is really no telling **EXACTLY** where the top will be, but if history is any indication, we should see some sort of a high volume sell off anywhere between $13,000- $14,000.
It is possible that we even climb all of the way up to $15,500 before we see this move happen.
The set-up scenario for that is that longs get way out of proportion 80/20 on margin exchanges/futures and it is also backed by some sort of FUD event like an exchange hack or US banning it or something like that.
It is **critically** important to lock in profits as we reach these critical zones to actually realize your gains as a trader.
This is why I take out 1X short hedges for myself as I do not mind losing out on 1-2% of my portfolio to protect my USD values (after gaining 20-30%) when we reach high timeframe resistance levels.
Thanks for reading and all of your support.
Note
Got the dump and the scalp long entry. Well done to anybody that trades along with me
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