Since I released the yearly forecast on January 22, BTCUSD has already tested the lower bound of the forecast twice, at around $30,000.
I don’t know if I should interpret this behavior as a sign of weakness or not. What is certain is that if the TOP of this halving cycle has been achieved it is very likely to test at least the 1st lower band of my monthly Kama average ($22,700).
Let’s see in detail the levels that I consider interesting to observe.
I would interpret a breach of the $29,800 level as a possible weakness signal, we certainly need to consider how long bitcoin will stay below this level.
In times of high temporary volatility, it wouldn’t be so bad a short permanence there; however, an extended stay below this level would have long-term bearish implications. What does that mean? This means the games are over for this cycle and we will have to wait for the next halving of 2024, so I would say 2025, to see a new all time high. This finding, I guess, comes as no surprise to you, by now bitcoin’s 4-year halving cycle is well known to the public.
The question is whether the price will stop at the first level of the Kama band or not. I think so, around $22,000 the support will be very strong and there will be buyers.
I rule out a hard test at the next support, around $14,000, also because bitcoin never dipped below the previous halving cycle high, in this case the last one was around 19,800 $ in December 2017; moreover, even during the corona crash, the price stopped at the first lower band (then $3,800)
I wonder what needs to happen to see bitcoin test the second price bracket at $14,000, if any of you have any ideas please let me know 🙂
Personally, I will be long again around the first support of the Kama average, around $22,000. If an extreme level of volatility occurs, I will increase the position to $14,000 with a doubled position size (1 unit at $22k and 2 units at $14k) because I need to capitalize when volatility is at extreme levels without any fear.
See you at the next update.