This chart plays into previous Bitcoin cycles but more importantly it showcases the similarities of the 2013 & 2018 cycles and questions the case for 2022 of "Where's the Bullish Divergence?"
The MFI (Money Flow Index) Indicator which incorporates the RSI + weighted volume shows that in all of Bitcoins 3 past cycle bottoms we have seen the MFI at an all time low with weeks later putting in a lower low in price and a higher low on MFI. We have yet to see this play out in the charts. Does it need to happen? no. However, we have yet to see it yet(on weekly) and a case for the bears would lead to a probability cause for a most likely scenario to validate an actual bottom is being put in.
You can see my bottoming chart for the next leg down in the linked ideas.
The MFI (Money Flow Index) Indicator which incorporates the RSI + weighted volume shows that in all of Bitcoins 3 past cycle bottoms we have seen the MFI at an all time low with weeks later putting in a lower low in price and a higher low on MFI. We have yet to see this play out in the charts. Does it need to happen? no. However, we have yet to see it yet(on weekly) and a case for the bears would lead to a probability cause for a most likely scenario to validate an actual bottom is being put in.
You can see my bottoming chart for the next leg down in the linked ideas.
Comment:
Ok so this chart has been playing out for many months now, and it's finally coming to one pivot point: The mid point in time (adjusted 2 weeks forward) and reaching the median line on the MFI. After observing the MFI trend upwards (in down trending) for some time now, I've been questioning the three possible scenarios to play out or a sequence of this all blending into one, which is most likely.
Short Term
1. The increase in MFI over this stalling of price action has started forming a divergence in MFI and Price, however, unconfirmed and Price Action has not been following suit. This leads me to believe that there could be some up side coming soonish or a great sell off which leads to scenario 2.
2. Given with the scenario of 1. there is a need for a pull back to create this overall reversal bullish divergence so a sell off could be very possible and as we approached the median line on MFI this is often a point of reversal.
3. The hidden bearish divergences that has now appeared since March 2022, leads me to believe scenario 2 is this effect as the trend still continues downwards to let the bullish divergence come into effect. Following this, the MFI will then create a high low, but a lower low in price.
See below an update to the MFI since posting this chart
Zoomed in picture of current period. Note This measured move is just an average given from past cycle bottoms, this does not need to play out.
Short Term
1. The increase in MFI over this stalling of price action has started forming a divergence in MFI and Price, however, unconfirmed and Price Action has not been following suit. This leads me to believe that there could be some up side coming soonish or a great sell off which leads to scenario 2.
2. Given with the scenario of 1. there is a need for a pull back to create this overall reversal bullish divergence so a sell off could be very possible and as we approached the median line on MFI this is often a point of reversal.
3. The hidden bearish divergences that has now appeared since March 2022, leads me to believe scenario 2 is this effect as the trend still continues downwards to let the bullish divergence come into effect. Following this, the MFI will then create a high low, but a lower low in price.
See below an update to the MFI since posting this chart
Zoomed in picture of current period. Note This measured move is just an average given from past cycle bottoms, this does not need to play out.
Comment:
I'd also like to update the price target noted in the description.
(- Price target range is from $13,000 - $9,725)
Since posting this chart I have noticing the similarities more so of 2015 rather then 2018. Having held this level at 19k for some time now the likelihood of dropping to these targets is becoming less likely.
(- Price target range is from $13,000 - $9,725)
Since posting this chart I have noticing the similarities more so of 2015 rather then 2018. Having held this level at 19k for some time now the likelihood of dropping to these targets is becoming less likely.
Comment:
Ok. A day later we now have price following suit. So scenario 1 has played out YAY!
This delays the scenarios now and we will see short-medium term see a pump. What I will be watching now is the future MFI prints, this will lead to what scenarios come out.
This delays the scenarios now and we will see short-medium term see a pump. What I will be watching now is the future MFI prints, this will lead to what scenarios come out.
Comment:
Update to this chart. I am calling out that this chart has now become invalidated and a new low has surpassed my time period.
- The average price drop from last know MFI low to bullish divergence confirmation is 6.77% with an average date range difference of 11.75% from both past cycles
- In both 2013-2018 cycles we created 2 bullish divergences before final bottom (approx. 50% between both)
- We are currently 6 weeks into an estimated 35 week range (plenty of time to b-rally) to where Oct 2022 could see 1st divergence > Feb 2023 we should have a clearing picture to what's occurred.
- Price target range is from $13,000 - $9,725
- On a bullish note overall, there is hidden bullish divergence (green dash) stretching back to Feb 2015 > June 2022.
Note that the Date/Price Ranges are MFI based and not price indicative, So the low would be in before we confirm the divergence.