Bitcoin has certainly been active lately. I can’t always tell what it’s going to do next, but I do understand what it has been up to and the latest BTC movements have helped to refine and confirm my analysis methods. Let me show you what I mean.
I managed to call the latest dip slightly in advance.
This was just before noon (UTC) on Wednesday when BTC was at about $12500:
For a while I thought I had it wrong as BTC pumped another $1000 northwards, but then it did correct.
As I said in “Altcoin Buying Masterplan (it’s working…)” two weeks ago, I have a good friend who I help with his crypto investing. Knowing that he doesn’t watch the markets, I sent him this on Wednesday:
… which was just as well, because a few hours later BTC did just that. I’m pretty glad that I managed to call it fairly exactly, though sorry that I didn’t put that information on Twitter too.
This is a reminder to the old investors, and perhaps new information to the new wave of investors: FUD happens.
I’ve heard Coinbase blamed for the price drop. Yes their platform locked up for an hour when BTC hit its peak, but no – that’s not why price fell.
The market was running hot, too hot. When that happens it’s always only a matter of time before a dip, a retracement or a correction. BTC was always going to dip. Coinbase was only the trigger, not the cause.
I also remind you that such corrections are necessary and are healthy. A climb without corrections is an unsustainable climb. The longer it takes to correct, the more severe the correction will be when it does happen.
Looking at the charts.
My regular readers will know that I like diagonal Fib levels and have used them extensively this year. Unfortunately the last couple of months of climbing have negated my Fib levels (which is normal), and has meant that I have had to redefine them.
I created a temporary set of Fib levels some time ago. I try not to publish such levels without first confirming them somehow. I now have that confirmation (and a few corrections to my levels).
This was my prototype diagonal Fib levels chart for BTC up until yesterday:
Considering that I deduced those levels in late May, I’m pretty happy with the result, I absolutely nailed the peak and trough of the latest price movement!
However, I didn’t like the fact that the price dipped below the bottom of my Fib chart during the first half of June. I could see that I obviously had the angle of the levels spot on, but I needed to refine the actual levels – which I have now done. Behold: Bit Brain’s latest BTC diagonal Fib levels chart:
While I’m showing you BTC charts, I might as well explain those other lines you can see: The dashed yellow line is a short-term price trend line – the line that BTC is roughly following at the moment. If price is below that line in the short-term then expect price to rise, if it is above the line, then expect it to fall. This line was instrumental in predicting the correction.
Zooming out, as you can see below, that $11773 line corresponds to previous peaks/resistance levels.
It is uncertain if that long-term trendline has any real value in this year or if it is specific to the 2015-2017 market, I will continue to monitor it.
As for what comes next, I Tweeted this yesterday. It remains my best guess for the moment:
Beyond that, I expect BTC to start making its way step-by-step up the diagonal Fib levels.
Yours in crypto
All charts made by Bit Brain with TradingView
"The secret to success: find out where people are going and get there first"
~ Mark Twain
"Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful"
~ Bit Brain