A Full Technical Breakdown Of Bitcoin

4 באפר׳ 2023

Bitcoin. Love it or hate it, it's one of the most important assets of our age. Digital gold? A new monetary system? A defense against inflation? All of these and more? The debate rages on.

For our two cents; it doesn't really matter. It's a highly volatile, highly liquid asset, which means that it is one of the best trading vehicles around. Long? Short? Doesn't matter.

In this post, we'll break down the current technical situation in Bitcoin fully, along with some of our thoughts at the end.

Ok so, first off. Directional bias. Which way should we be trading this thing? Depends on your timeframe.

If you're holding period is longer than 6 months, then probably long. The 6-month trend is incredibly strong and has been throughout Bitcoin's lifecycle.



Everyone knows this though, right? It's the main reason people trade crypto in the first place - the chance for monster gains.

What about more recently? Let's take a look at the monthly timeframe.



Zooming in, and we can see the situation is a bit more interesting. It seems as though we're in the midst of a downtrend.

Let's zoom in some more to the weekly timeframe.



Hmm... things getting more complicated.

Long term, it looks like we're Bullish. Medium term, it looks like we're in a downtrend, and on the shorter term, we're starting to tail back up. Time to buy? Not so fast. Let's overlay some supply and demand zones over everything.



Alright. So we've got serious supply of Bitcoin at 60k and above, and serious demand for Bitcoin at 15k-20k. What about this middle patch? Let's turn off our trend analysis tool to get a more granular view.



Well, from this perspective, it looks like we're well off of a demand zone, and coming into a potential area where there was demand before. This would normally be bullish, but everyone who bought there before the breakdown may be looking to dump out of their coins at even.

So, with Bitcoin solidly above 20k and almost to the potential supply area at 31k, now may be a pretty bad time to buy.

Let's switch things up and swap to what the range traders are looking at. Is there probability for a move higher or lower?



As it would appear, yes. There is. Things look a bit extended into 'resistance' here, and while things could certainly go higher, probability is not on that side. The chart is suggesting that at the very least, it needs more time to digest this move. This should make trading over the next month or so a challenge.

Alright. Let's add it all up.

In short, we've got a long-term uptrend. So, we want to be buyers of the asset.

What about the recent action? It seems that we are coming out of the downtrend we experienced over the last year, so sometime soon could be an ideal entry point?

Is now the time? No. Probably not. We're extended on shorter timeframes into the resistance area around 30k-32k, and a move back to 20-22k is the most likely. From there, that would be a potentially much better time to get involved, with more probabilities on your side.

Have questions? Thing we're wrong? Tell us why in the comments!

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Cheers!

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