BITCOIN The importance of the 1W MA50 for reaching $250k.

5 ก.ย. 2023

Bitcoin (BTCUSD) remains under heavy bearish pressure for almost 2 months, making market participants anxious to say the least. In times like this, it is always best not to lose sight of the bigger picture and look for clues on the wider time-frames. This chart is on the 1W time-frame and illustrates a very unique pattern that splits BTC's historic price action into 4 phases that can potentially not only reveal the next cyclical Top but also give us an idea whether the recent correction can endanger the new Bull Cycle or not. This is practically the framework of a previous study we've conducted but we some new updates.

** The Two Phases **
As you see, the Cycles are divided into Bear-to-Bear (blue) and Bull (green) Phases. The Bear-to-Bear begins at the start of the Bear Cycle and ends at the bottom of the next Bear Cycle. The Bull Phase starts on that bottom and ends at the top before the Bear begins. We are currently on the new Bull Phase, which in accordance to the previous Bull Phase, the price is pulling back (ellipse shape) through consolidation towards the 1W MA50 (blue trend-line) that is technically the long-term Support during this part of the Cycle.

The 1W RSI has been pulling back after turning overbought since April, similar to what happened on December 14 2015. It is easy to understand that the 1W MA50 is the most critical Support right now as it never broke downwards during the previous Bull Phase. Technically we have to assume that as long as it holds, BTC remains on a long-term bullish trend.

** The RSI symmetry **
The 1W RSI is particularly helpful when it comes to mapping those Phases and identifying identical spots in time, as the symmetry between Phases is astounding. The Cycle Top is easily revealed by the RSI, followed by Lower Highs that drive it to an oversold state, where investors can start buying again. Another distinct characteristic is the Overbought Volatility of the RSI as the price rises within its Bull Phase.

Technically the RSI remains on a bullish trend as it just hit this week the Higher Lows trend-line that started after its bottom. This is again a similar behavioral pattern as with the previous Bull Phase and the Higher Lows test in February 2016. If the 1W MA50 is indeed the long-term Support again, then we should see the 1W RSI bouncing now on this Higher Lows trend-line and approach the overbought territory by the end of the year.

** The Cyclical Pivot **
What is perhaps the most important part of this cheat-sheet, is the Cyclical Pivot trend-line. That starts at the bottom of the Bear-to-Bear Phase, supports all the way and then gets broken near the start of the Bull Phase. The key attribute is that when BTC hit it again on December 11 2017, the Bull Phase's Top was formed. As a result, we can argue that when BTC hits the new Cyclical Pivot trend-line again, we could have the new cyclical Top.

** The Fibonacci Time levels and Halvings **
Since the Phases appear to be getting longer, we can use metrics that incorporate this sense of proportionality, such as the Fibonacci Time Zones. The first Bull Phase peaked just after Fib Time extension 1.8. Halving 1 was a little before the middle (Fib 0.5) of the Bear-to-Bear Phase, while Halving 2 was at the middle of the Bull Phase. On the last Bear-to-Bear Phase, Halving 3 was almost on its middle. If the nw Bull Phase extends as long as Fib 1.8, then Halving 4 will also fall exactly on its middle. Indeed an interesting symmetry, a behavioral pattern that BTC often follows.

We can expect the new Bull Phase to last up to 187 weeks (1309) days, which is where the 1.8 Fibonacci Time extension is. If so then it is possible to hit the Cyclical Pivot trend-line at a price of 400k by January 2026. If it is as long as the previous Bull Phase, i.e. at least 152 weeks (1064 days), then by that time a technical contact with the Cyclical Pivot can be at around 250k.

That's at least how the model develops itself so far, but what do you think? Can the 1W MA50 hold and lead BTC to at least a $250000 new Top? Feel free to let us know in the comments section below!

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