I am writing this update to provide clarification to the analysis posted the other day as I had said that the price range support range I am using has contracted a bit giving me a zone of support from 36 to 42 thousand dollars, why this? Because I use 60 periods to calculate volatility and more than 60 periods or weeks have passed since the March 2020 low where there was a correction similar to this, so the spike in volatility recorded in this low of last year is no longer included in the calculation.
Hence the question “How much period to use?” is legit, in some cases it makes sense to fine-tune the indicator settings to better suit what is happening (an increase in volatility).
For those who use my indicator with tradingview, they can check what I say for themselves by increasing the “rms periods” parameter from 60 to 70 for example.
That said, so the support zone is corrected to around 31-40 grand and I would say so far it’s worked out pretty well, that means we’re still within limits and a trend reversal on the chart weekly is not yet confirmed, so far we only see volatility at work.
We will have to wait until the end of this week and next week to better assess the ongoing correction to check if the bitcoin price will stay above $31,000 or not.
BTCUSD Weekly Chart