mgibson91
Long

BTC - Long term / weekly bullish outlook (+2014 comparison)

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
NOTE: Please take everything below with multiple salt pinches.

For those who are considering buying cryptos around this time and or holding on for the mid / long term, the rapid influx of shorts today and possibly the frequent comparisons the 2014 crash might cast a fair amount of doubt into the picture.

The chart details most of this, but if we take a look a the weekly Bitcoin chart (about to close in half and hour), IMO , we see a lot of reasons for confidence:

  • Three increasing green candles
  • A bullish RSI divergence (albeit a small one)
  • A big, clean MACD crossover in the pattern crossing bullish after a very neat consolidation just under 0. In my experience in smaller time frame, this MACD signature is pretty bullish!
  • Higher stochastic RSI crossover, typically a bullish thing (especially when the MACD crosses over at the same time)
  • 20VWMA is above 20SMA
  • Throughout the 2018 *crash* OR pretty standard price action weekly time frame, the bottom bollinger band hasn't been touched once. Plus the last low was further away from the bottom Bollinger line (a pivot further away from a bollinger band than the previous pivot being a well known indication of weakening trend strength)
  • Likely that we are in the latter stages of a double / triple bottom with multiple instances of strong support

Comparison to 2014 (around this September time of year)

Whilst there may be some visual similarities with 2014 when just looking at the price, there are some significant differences when we stick the indicators on and a pretty dramatic different in worldwide adoption, awareness and trading volume . Here are some things that we saw in 2018 which did infact indicate a deeper crash / prolonged bear market that we do NOT see in 2018 (feel free to compare with above)

  • Stoch RSI was pretty oversold in June and shortly after crossing bearish , crossed bearish again even lower
  • Shortly after second bearish Stoch RSI cross, MACD which had only see a very brief and unconvincing bullish cross, crossed bearish again (shortly after the stoch RSI crossed bearish from an oversold position - a well regarded prior confirmation for a bearish MACD cross)
  • 20VMWA below 20SMA indicating volume is on the bearish side
  • At the start of September 2014, MACD was actively diverging bearishly and heading below zero

Concluding thoughts

In my opinion, on the weekly time frame we are looking at the end of a very neat correction to a massive run that is just about to tick over into bull mode again. We have just formed a weekly higher high, indicators are looking bullish and we are very close to breaking a trendline that won't leave many barriers ahead. It might turn out these recent shorts get used as rocket fuel!

There are barriers ahead, the testing of which upon breaking (i.e. resistance levels, daily 200MA, 10K .etc) could serve as some great entry points
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