To understand where we are at in the BTC market cycle, we need to consider the BTC economics.
Just like when traditional markets react positively to a central bank lowering interest rates due to increased spending, the BTC market reacts the same way to the block size halving due to decreased selling by the miners.
Traditional markets are much more speculative in this aspect because unless you’re in the inner circle you can only speculate whether a central bank will raise or lower interest rates. The BTC markets on the other hand are much simpler. Everyone knows with 100% certainty that the block size halving will occur with a fairly accurate date. The BTC market WILL have priced this in already when it occurs.
Legend
Macro trends, indicators and patterns.
1. Red dotted – (Schiff pitchfork) This trend starting from back in 2011. I wouldn’t consider this carrying a whole lot of weight due to the fact that it’s trend can vary drastically depending on the BTC chart it’s drawn on, but on the Bitstamp which most people use for charting long term BTC price action it’s interesting that it converges on some key levels.
2. Green – (1600 day moving average) This acted as support for both Jan and Aug 2015 bottoms
3. Pink – (Date and price range) We have just passed the hi/low time length of the previous cycle, and a full retracement equal to that cycle would take us to 2575. However, if you don’t include the wick its 2849
4. Black – (Order block) 2967 acted as support or resistance on 3 occasions in 2017, and if it can’t hold then 2967 to 2291 look to me to be the longest consolidation range of the previous bull market.
5. Black dotted – (BTC halving dates)
Mid term trends, indicators and patterns.
1. Green dotted – (Schiff pitchfork) We will probably need a clean break of this pitchfork before we see a higher high.
2. Blue dotted – (Cyclic lines) Roughly 62 days between bottoms of this bear trend.
Micro trends, indicators and patterns.
1. Falling wedge – (Potential reversal pattern)
2. Head and shoulders pattern – (Potential reversal pattern) This is very speculative until we get more data, but if the falling wedge plays out, there’s a good chance of this developing.
2019 Things to note
1. We are currently 81 days closer to the block size halving in this cycle than the January bottom of the previous bear market.
2. Just before the block size halving, we made it back to the 61.8% fib of the 2014 bear market. Due to the similarities so far in these 2 cycles there’s a chance we may do so again.
Price Prediction
1. Red line – If the above analysis plays out, we could see the price back in the 12000-13000 range in May 2020 ready for the next parabolic move to all time highs shortly after.
Just like when traditional markets react positively to a central bank lowering interest rates due to increased spending, the BTC market reacts the same way to the block size halving due to decreased selling by the miners.
Traditional markets are much more speculative in this aspect because unless you’re in the inner circle you can only speculate whether a central bank will raise or lower interest rates. The BTC markets on the other hand are much simpler. Everyone knows with 100% certainty that the block size halving will occur with a fairly accurate date. The BTC market WILL have priced this in already when it occurs.
Legend
Macro trends, indicators and patterns.
1. Red dotted – (Schiff pitchfork) This trend starting from back in 2011. I wouldn’t consider this carrying a whole lot of weight due to the fact that it’s trend can vary drastically depending on the BTC chart it’s drawn on, but on the Bitstamp which most people use for charting long term BTC price action it’s interesting that it converges on some key levels.
2. Green – (1600 day moving average) This acted as support for both Jan and Aug 2015 bottoms
3. Pink – (Date and price range) We have just passed the hi/low time length of the previous cycle, and a full retracement equal to that cycle would take us to 2575. However, if you don’t include the wick its 2849
4. Black – (Order block) 2967 acted as support or resistance on 3 occasions in 2017, and if it can’t hold then 2967 to 2291 look to me to be the longest consolidation range of the previous bull market.
5. Black dotted – (BTC halving dates)
Mid term trends, indicators and patterns.
1. Green dotted – (Schiff pitchfork) We will probably need a clean break of this pitchfork before we see a higher high.
2. Blue dotted – (Cyclic lines) Roughly 62 days between bottoms of this bear trend.
Micro trends, indicators and patterns.
1. Falling wedge – (Potential reversal pattern)
2. Head and shoulders pattern – (Potential reversal pattern) This is very speculative until we get more data, but if the falling wedge plays out, there’s a good chance of this developing.
2019 Things to note
1. We are currently 81 days closer to the block size halving in this cycle than the January bottom of the previous bear market.
2. Just before the block size halving, we made it back to the 61.8% fib of the 2014 bear market. Due to the similarities so far in these 2 cycles there’s a chance we may do so again.
Price Prediction
1. Red line – If the above analysis plays out, we could see the price back in the 12000-13000 range in May 2020 ready for the next parabolic move to all time highs shortly after.