Bitcoin Macro Analysis of Weekly SMA's on log chartMost of the information can be found on the chart. I decided to analyze the relationship of several different Simple Moving Averages on weekly candles. I chose to use BLX as the price history goes back the longest. This allowed me to even consider 300 and 400 week moving averages. Comment with any follow up questions you might have.
First, I studied the SMA interaction of the previous bear market. Here is what I found.
1) 200 SMA was never broken by price (candle never closes below)
2) 20 SMA never allowed to break below the 200 SMA
3) After 1st test of the 200 SMA, price traveled to 20, 50, 100 SMA's (with retest of 200 in btwn)
4) Uptrend resumed once 20 SMA broke above 100 SMA
5) 20 SMA never again fell below the 50 SMA until mid 2018
6) Price never closed below 20 sma until the "top"
Next, I applied what I found to the current environment.
1) As we approach the decision point of the 20 & 200 SMA's, bulls are left with 2 options.
Assuming the 200 SMA will hold, bulls will look to bet heavy with each visit
Alternatively, cautious bulls can wait for a future confirmation, such as historically occurs with each touch of the 50 or 100 SMA's.
2) Bears will look to short at the 200 SMA with any high timeframe candle close, stops at or just above the 200.
3) Wildcard option: Price breaks 200 SMA, finds support on either the 300 or 400 SMA (white and yellow) above. A new accumulation traderange likely takes place at this level.
(I especially find Wildcard option 3 interesting, as it would be a long term confirmation of support after a decade long bull run AND it's not really something most traders are looking for atm.)
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This is for educational purposes only. As always, comments/ideas/thoughts appreciated.
- Jack
