Bitcoin 1W Trend Analysis - Correction Likely
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I wanted to provide a weekly graph to give a proper overarching look of BTC’s performance over the last half a year.
Since January 28, BTC is +155.80%. We have been following a parabola curve for 119D (green rectangle). For context, I charted out a few of the other parabola ascents BTC has had:
The first went +107.24% and lasted 56D. The second went 232.63% in 35D.
We have been on a strong bull run for the last 119D, with the weekly RSI currently sitting at 79. As we can see, BTC is more than capable of sustaining overbought status on the weekly, but in this case I believe we might be due for a strong correction.
Circled in red is a doji, a well-known indicator of indecision (or continuation). The length of this bull movement, coupled with this doji on the weekly create a strong sell signal from a TA standpoint. The psychological resistance of $10,000 is directly overhead as well.
The previous doji (aqua) acted as a continuation pattern, but this doji was not directly on the back of a true parabola ascent, it was on the back of a high-vol week breaking out of the bear market. Contextually, this matters a lot.
Moving forward, I think there are 3 most-likely outcomes (on the weekly).
A. We see a correction week this week. This would validate the doji as a reversal indicator and break the parabola curve. Targets for this range would lie between $6,200 and $7,600.
B. We continue up to test $10,000 this week, get rejected and revisit the $7,800 - $8,400 range.
C. We breakthrough the $9,000 and $10,000 resistances and bulldoze to test the $12,000 resistance. This would validate the doji as a continuation pattern and keep us on the parabola ascent.
My subjective probabilities on the outcome:
A: 50%
B: 30%
C: 20%
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Since January 28, BTC is +155.80%. We have been following a parabola curve for 119D (green rectangle). For context, I charted out a few of the other parabola ascents BTC has had:
The first went +107.24% and lasted 56D. The second went 232.63% in 35D.
We have been on a strong bull run for the last 119D, with the weekly RSI currently sitting at 79. As we can see, BTC is more than capable of sustaining overbought status on the weekly, but in this case I believe we might be due for a strong correction.
Circled in red is a doji, a well-known indicator of indecision (or continuation). The length of this bull movement, coupled with this doji on the weekly create a strong sell signal from a TA standpoint. The psychological resistance of $10,000 is directly overhead as well.
The previous doji (aqua) acted as a continuation pattern, but this doji was not directly on the back of a true parabola ascent, it was on the back of a high-vol week breaking out of the bear market. Contextually, this matters a lot.
Moving forward, I think there are 3 most-likely outcomes (on the weekly).
A. We see a correction week this week. This would validate the doji as a reversal indicator and break the parabola curve. Targets for this range would lie between $6,200 and $7,600.
B. We continue up to test $10,000 this week, get rejected and revisit the $7,800 - $8,400 range.
C. We breakthrough the $9,000 and $10,000 resistances and bulldoze to test the $12,000 resistance. This would validate the doji as a continuation pattern and keep us on the parabola ascent.
My subjective probabilities on the outcome:
A: 50%
B: 30%
C: 20%
Like and follow for more!
Nota
ALSO: the arrows in scenarios A and B should be steeper, and scenario C's arrow should be more vertical to accurately reflect the timeframes described!
Penafian
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