Bitcoin - The Epic Fight with the Bull Market Barrier
Howdy fellow traders!
It is the time to be really excited. This is the full story of Bitcoin's battle of the century, a carefully developed piece of TA that has grown over the years.
My most recent update was published right before the dump from 10k to 3.6k (tradingview.com/chart/BLX/jrCNEBL9-Confirming-10350-as-support-marks-the-end-of-the-BTC-bear-market/). This dump is further proof of the strength that lies behind this analysis.
Pre-bull phases over the years
Let's start with a look at the pre-bull phases before PA accelerated into a bullrun.
2012:
2016:
2020?:
The big questions is of course whether BTC really is in a pre-bull phase right now or if it's 'rolling over'.
Many theories trying to identify the market cycle
Countless very smart analysts have come up with significant theories around Bitcoin and its market cycles - especially when it comes to post-halving analysis. My analysis doesn't include the Halving or any other events, just plain TA. If I were to add support to their theories by using a different methodology, it'd be quite significant overall.
Methodology
Over the years, I've come to believe strongly there must be a common denominator for all price action. What determines levels when there are no levels yet - what is creating them? What is the main driver of price discovery?
My answer to that question is Fibonacci. After experimenting with indicators and developing them myself on a daily basis for years, I've come to understand that it all breaks down to Fibonacci. It doesn't even matter what kind of instrument you use, Fib Retracement Levels, Extension Tools, whatever..., applying Fib values usually leads to reliable results.
But, instead of applying them to static levels, I've decided to dive deeper into the understanding of dynamic levels, namely Bollinger Bands. I've discovered the free indicator 'Fibonacci Bollinger Bands' on Trandingview and started doing experiments with it. But, instead of using the default short-term settings, I've switched over to using mid- to long-term settings in order to identify market cycles, tops and bottoms. Upon experimenting, I've discovered a band of Fib levels that can be considered the 'Bull Market Barrier'. It is a string of Fibonacci Bollinger Bands that is the perfect divider between bear and bull cycles.
Applying Fibonacci Bollinger Bands to Pre-Bull Phases
2012:
2016:
2020:
Interpretation and current situation
From what I can see, this band of Fib-based Bollinger Bands is 100% accurate in telling us when we are in a major bull or bear cycle. It is ridiculously accurate, it gets tested multiple times to the teeth, broken, tested, and the acceleration begins. This reliability is outstanding and it is something I've been investigating until today. So where are we today?
Looking at the chart above, we are in our 6th attempt to break the Bull Market Barrier. It is located directly above our current position at 10-10.8k, and it has been for a while, which is the reason why it is suddenly this extreme of a zone. Bitcoin is seemingly preparing another attack as we speak, and out of all the analysts out there, I doubt that it is clear to everybody how important this level is where we are at right now.
How did we enter the bull market in 2012 and 2016?
In both cases, price action slowed down while it was approaching the band. In 2012, BTC traded a little over 1 month within the band before price broke it to the upside. In 2016, it went a bit differently (see below).
Today, we are not as close to the band as before, but BTC is pushing up over and over again, currently in the 6th attempt to break through. This is the first time though we see a stable sideways range directly below the band, which was the case in 2012 and 2016 as well. This stable sideways range made BTC simply grind through that resistance at some point.
A major difference to 2016 is that BTC formed that neat triangle seen above, making lower highs and approaching a band that was moving slightly downwards. Today, BTC needs to make a higher high to break the resistance, which is slowly rising. A rising bollinger band is more difficult to break than a declining bollinger band. This means, apart from making a higher high, which will be difficult by simply grinding upwards, BTC also needs to pump against rising resistance. I wonder if this can work out without producing a strong impulse wave up.
To summarize
Besides the Bull Market Barrier, there is also a Bottoming Zone that has been found to work very accurately. Also, there is a Topping Zone to parabolic bullruns, all determined by the use of the same Fibonacci Bollinger Bands.
We are currently slowly approaching the Bull Market Barrier in the same fashion as 2016. Overall picture is bullish. However, if the principle of not longing into resistance was ever worth anything to a trader, this is the moment to abide by that rule. The risk of rejection is still extraordinarily high.
I'm happy to share this in time as we are clearly in a zone of extreme pressure right now where a breakout or crazy PA could occure anytime. My final chart is a multi-timeframe Fibonacci Bollinger Band derived heatmap I have developed to identify pressure zones as well as S&R.
Thanks for reading and trade safe!
It is the time to be really excited. This is the full story of Bitcoin's battle of the century, a carefully developed piece of TA that has grown over the years.
My most recent update was published right before the dump from 10k to 3.6k (tradingview.com/chart/BLX/jrCNEBL9-Confirming-10350-as-support-marks-the-end-of-the-BTC-bear-market/). This dump is further proof of the strength that lies behind this analysis.
Pre-bull phases over the years
Let's start with a look at the pre-bull phases before PA accelerated into a bullrun.
2012:
2016:
2020?:
The big questions is of course whether BTC really is in a pre-bull phase right now or if it's 'rolling over'.
Many theories trying to identify the market cycle
Countless very smart analysts have come up with significant theories around Bitcoin and its market cycles - especially when it comes to post-halving analysis. My analysis doesn't include the Halving or any other events, just plain TA. If I were to add support to their theories by using a different methodology, it'd be quite significant overall.
Methodology
Over the years, I've come to believe strongly there must be a common denominator for all price action. What determines levels when there are no levels yet - what is creating them? What is the main driver of price discovery?
My answer to that question is Fibonacci. After experimenting with indicators and developing them myself on a daily basis for years, I've come to understand that it all breaks down to Fibonacci. It doesn't even matter what kind of instrument you use, Fib Retracement Levels, Extension Tools, whatever..., applying Fib values usually leads to reliable results.
But, instead of applying them to static levels, I've decided to dive deeper into the understanding of dynamic levels, namely Bollinger Bands. I've discovered the free indicator 'Fibonacci Bollinger Bands' on Trandingview and started doing experiments with it. But, instead of using the default short-term settings, I've switched over to using mid- to long-term settings in order to identify market cycles, tops and bottoms. Upon experimenting, I've discovered a band of Fib levels that can be considered the 'Bull Market Barrier'. It is a string of Fibonacci Bollinger Bands that is the perfect divider between bear and bull cycles.
Applying Fibonacci Bollinger Bands to Pre-Bull Phases
2012:
2016:
2020:
Interpretation and current situation
From what I can see, this band of Fib-based Bollinger Bands is 100% accurate in telling us when we are in a major bull or bear cycle. It is ridiculously accurate, it gets tested multiple times to the teeth, broken, tested, and the acceleration begins. This reliability is outstanding and it is something I've been investigating until today. So where are we today?
Looking at the chart above, we are in our 6th attempt to break the Bull Market Barrier. It is located directly above our current position at 10-10.8k, and it has been for a while, which is the reason why it is suddenly this extreme of a zone. Bitcoin is seemingly preparing another attack as we speak, and out of all the analysts out there, I doubt that it is clear to everybody how important this level is where we are at right now.
How did we enter the bull market in 2012 and 2016?
In both cases, price action slowed down while it was approaching the band. In 2012, BTC traded a little over 1 month within the band before price broke it to the upside. In 2016, it went a bit differently (see below).
Today, we are not as close to the band as before, but BTC is pushing up over and over again, currently in the 6th attempt to break through. This is the first time though we see a stable sideways range directly below the band, which was the case in 2012 and 2016 as well. This stable sideways range made BTC simply grind through that resistance at some point.
A major difference to 2016 is that BTC formed that neat triangle seen above, making lower highs and approaching a band that was moving slightly downwards. Today, BTC needs to make a higher high to break the resistance, which is slowly rising. A rising bollinger band is more difficult to break than a declining bollinger band. This means, apart from making a higher high, which will be difficult by simply grinding upwards, BTC also needs to pump against rising resistance. I wonder if this can work out without producing a strong impulse wave up.
To summarize
Besides the Bull Market Barrier, there is also a Bottoming Zone that has been found to work very accurately. Also, there is a Topping Zone to parabolic bullruns, all determined by the use of the same Fibonacci Bollinger Bands.
We are currently slowly approaching the Bull Market Barrier in the same fashion as 2016. Overall picture is bullish. However, if the principle of not longing into resistance was ever worth anything to a trader, this is the moment to abide by that rule. The risk of rejection is still extraordinarily high.
I'm happy to share this in time as we are clearly in a zone of extreme pressure right now where a breakout or crazy PA could occure anytime. My final chart is a multi-timeframe Fibonacci Bollinger Band derived heatmap I have developed to identify pressure zones as well as S&R.
Thanks for reading and trade safe!
Crypto TA & FireflyTA indicator tutorials:
Twitter: twitter.com/FireflyTA
YouTube: youtube.com/channel/UC3Hxf0omt3dMqAxGQBnXJPA
Discord: t.co/Ky7gE7zfja
Twitch: twitch.tv/fireflyta
Twitter: twitter.com/FireflyTA
YouTube: youtube.com/channel/UC3Hxf0omt3dMqAxGQBnXJPA
Discord: t.co/Ky7gE7zfja
Twitch: twitch.tv/fireflyta
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.