06/02/2019/11:00CET
The downward grind continues, are cryptos dead or are they asleep? Let's take a look at an interesting indicator and take a peek into the future.
If you are a day trader, then life is tough at the moment in the crypto world. There are short trades that can yield some nice profits, but they are the exception, and you are more likely to be a net looser chasing them, unless you are quite lucky. I am trying to stay on the sidelines and preserve my capital.
I am not a #Bitcoin maximalist but I do believe that in the first wave of the crypto revolution (we are not even halfway through it by my count) will see Bitcoin and a short select few alts that will have solid staying power.
On that point, I want to share some insights into #BTC with you.
Long term outlook
In order to be a longer swing trader or what many may call an 'investor' it is important to look at long term charts to pick positions and to get a feeling for the market's rhythm.
Bitcoin is still a young animal, its value behaviour has still only a short history to look at, and the further back in history we look (at anything) the more noisy the data becomes, because of lower liquidity.
The best we have at the moment is Bitstamp's BTCUSD pair. This is the pair with the longest single history.
BTCUSD weekly chart
- I see a double bottom on the 200 week moving average happening about right now.
- The first touch was around mid dec 2018
- That bounce reinforced this indicator as one to watch for BTC
- Today this indicator is sitting at 3314USD while current price action is at 3365usd. Just 50USD below us. Could this be the floor we all look for?
- It still has an upward bias despite the bloody 13 months we have just endured.
A look back in time...
- The 200 week moving average obviously starts in week 201 of a data set
- Here, the start coincides with the last time BTC touched it back in Sept 2015
- If we were to extrapolate this indicator back in time we could imagine a triple touchdown on it starting at the lows in Jan 2015, then Apr 2015, and then the Sept 2015.
- Could we be at our 2 out of 3?
- If so, then the floor will be at ~3300 USD
- Not so fast, it was 21 months before we had left the last bottom test in the rear view mirror, we are only at month 13 post crash... 8 months to go?
Some food for thought my dears.
As always guys, leave comments, have fun and trade safe.