Cryptocurrencies

One Chart, One Indicator – BTC 30 April

I’m trying something new today: a single chart with a single indicator/drawing tool on it. In theory this should give a nice no-clutter perspective of a single even or time period. If is goes well I may consider making more posts like it.

The chart I have chosen is a relatively long-term Bitcoin chart. The tool I have chosen is a Fibonacci Retracement Level overlay. Let us see what we can learn from a single chart and a single drawing tool.

Today’s chart runs from mid-2017 to the end of April 2019. If you follow my TA posts you may know that I have been experimenting with long-term Fib levels and with diagonal Fib levels lately, as well as a combination of the two. Diagonal Fib Levels are proving to be very successful, even more so than their regular horizontal counterparts! Long-term Fib Levels require further study on my part and combination Fib levels are not looking as promising as what I had hoped – I’ll keep experimenting.

Made by Bit Brain with TradingView

What you see here is my best attempt at accurate medium to long-term Fib levels for BTC. Note that these levels are retracement based: i.e. they work from top to bottom – not bottom to top. While broadly similar, there is a difference in Fib levels when you turn them around because the 0.786 and 0.236 levels are not equidistant from the centre (I won’t explain why that is here, you’re free to discuss it in the comments if you so wish).

The period covered is the entire 2018 bear market and beyond. Now that the bear is dead and buried, these levels show us some interesting things. In retrospect, we might have seen some of these things far earlier if we’d know what to look for:

  • The market bottomed out at the 1.0 level which was already established during September 2017 (during the bull run).
  • ALL of the major Fib levels indicated their presence (as a minor resistance level) during the 2017 bull market.
  • The BTC All Time High was an anomaly.
    • This is why the peak decayed so rapidly and is also why the rebound attempt in January 2018 floundered at $17150.
    • The ATH should have been at $17150, but very bullish momentum carried it a little higher. In retrospect we should have set sell orders at $17000
  • Each successive attempted price rise turned around at the next lowest Fib level, barring the 0.286 level which was skipped.
    • It’s possible that 0.286 was skipped because of the double visit to the 0.0 level at $17150.
  • The main support level was the 0.786 level – already established in October 2017 and confirmed the following month.
    • Once this level was breached in November 2018, we should have known immediately that the capitulation event was underway – instead of debating it as we did for several months.
  • Had we correctly identified the Fib levels in the 2017 bull run, we could have predicted turn around points at the bottom and top of each wave to within an accuracy of around $200.
    • While nobody could have been certain of the extent or predictability of the bear run, it does reinforce the template of the previous major bear run and gives us something far more certain to work from during the next big bear market – possibly in 2022 if the unconfirmed current pattern holds.
      • The most important and possibly easiest levels to identify will be the next 0.786 and 1.0 levels which will define the bottom of the next bear market.
  • We may well revisit $3000 one or more times during this sideways phase. This will remain a possibility until we break back through the 0.786 level and consolidate in the low $6000s.

This is an exciting chart, not so much for now, but more for the next bear market. There is still some predictive value left in this chart. I expect to encounter resistance at all those major Fib levels on the climb back up to $20000 and beyond – a process which should still take about another year.

You may rest assured that I will be watching the next bull run extremely closely to try to determine the next set of major Fib levels in advance of the next major bear market. While I am a hodler at heart: if I can do that accurately (and that’s a big “if”) then I will probably attempt to trade the levels with at least a portion of my holdings. I will also move some crypto value into another asset class (maybe precious metals) for the duration of the next bear market.

Don’t expect to see those levels in my blog posts, I’ll be selling them in non-disclosure agreement private chats for at least 100 BTC a time! 😃

Did you enjoy the “One Chart, One Indicator format? Let me know how much you despise my almost-blank-canvass TA in the comments. 

Yours in crypto

Bit Brain

“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

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