Bitcoin's joy ride to the next halvening
Bitcoin BTCUSD (Bitstamp): Comparison between the 2014/2015 bear market and the bear market today to identify similarities and to plot a forecast for the months ahead leading up to the next halvening around May 2020 using Fibonacci retracement and significant levels of support and resistance within 2 main channels on the weekly chart. Both bear markets have resulted in the formation of bullish falling wedges and both held the green trend line as support in an uptrend before moving up.
At the end of the 2014/2015 bear market, there was an upside breakout from the pink falling wedge. The current yellow channel support held as strong resistance at that stage and should hopefully hold as significant support after the upcoming breakout from the falling wedge playing out at the moment. Price should reach and test MA50 resistance at around $8600 if the strong $7200 resistance can be broken on the breakout and if there is sufficient volume on the move. Price should then fall back to the green trend line to retest support. A close below the yellow channel support and below the green uptrend will mean that a move to the bottom of the orange channel support is more likely before any sustainable move upwards. If these support levels hold after retest, however, then there should be a sustained movement up and the beginning of a new long term uptrend.
The bullish case is more likely imo with all the institutional accumulation and involvement in this space i.e Fidelity, Bakkt, and the imminent ETF approval in Q1 2019. Even without an ETF, the Bitcoin halvening is enough of a catalyst itself, leading up to 2020.
If we follow the same pattern as in 2014/2015 then we should break out from the wedge, test weekly MA50 resistance (like it did in 2015), test green uptrend support, then consolidate around $7600 at 0.382 fib resistance. A strong break from $7600 should target $12200 at 0.618 fib resistance with a drop to 0.5 fib support at around $9900 before gradually making its way up to an ATH of $51200 as we approach the next bitcoin halvening around May 2020 and should then drop to the 1.618 fib support at around $31700. BTCUSD should rally in the months leading up to this event which adds weight to a bullish long term view. Volume is very low as it was just before the breakout from the falling wedge in 2015. Keep an eye out for the strong green candles because these will be needed to break through the various levels of resistance on the way up.
Be careful shorting at these levels and keep an eye on the support retest after breaking out of the current wedge. Looking good for 2019!
Happy trading and good luck!
Previous chart:
At the end of the 2014/2015 bear market, there was an upside breakout from the pink falling wedge. The current yellow channel support held as strong resistance at that stage and should hopefully hold as significant support after the upcoming breakout from the falling wedge playing out at the moment. Price should reach and test MA50 resistance at around $8600 if the strong $7200 resistance can be broken on the breakout and if there is sufficient volume on the move. Price should then fall back to the green trend line to retest support. A close below the yellow channel support and below the green uptrend will mean that a move to the bottom of the orange channel support is more likely before any sustainable move upwards. If these support levels hold after retest, however, then there should be a sustained movement up and the beginning of a new long term uptrend.
The bullish case is more likely imo with all the institutional accumulation and involvement in this space i.e Fidelity, Bakkt, and the imminent ETF approval in Q1 2019. Even without an ETF, the Bitcoin halvening is enough of a catalyst itself, leading up to 2020.
If we follow the same pattern as in 2014/2015 then we should break out from the wedge, test weekly MA50 resistance (like it did in 2015), test green uptrend support, then consolidate around $7600 at 0.382 fib resistance. A strong break from $7600 should target $12200 at 0.618 fib resistance with a drop to 0.5 fib support at around $9900 before gradually making its way up to an ATH of $51200 as we approach the next bitcoin halvening around May 2020 and should then drop to the 1.618 fib support at around $31700. BTCUSD should rally in the months leading up to this event which adds weight to a bullish long term view. Volume is very low as it was just before the breakout from the falling wedge in 2015. Keep an eye out for the strong green candles because these will be needed to break through the various levels of resistance on the way up.
Be careful shorting at these levels and keep an eye on the support retest after breaking out of the current wedge. Looking good for 2019!
Happy trading and good luck!
Previous chart:
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