Critical Point – Bitcoin Trading Ideas, Analysis

It’s always best to look, as I always say, at broader timeframes to understand how to build a winning operating strategy. I invite you to take a look at this BTCUSD monthly chart first, before commenting on it.

We are clearly compressed into a price range well defined by the monthly average which defines the equilibrium point of this halving cycle (2020-2024) and an intermediate level with reduced volatility (about $28,000).

A failure to move and stay above Kama’s monthly average would in my opinion be bearish and would clearly be followed by a decline towards the support zone of this halving cycle between $11,000 and $18,000.

With a confirmed break of the monthly average above $40,000 then the view would change and bitcoin would return to a position of strength which should lead it back towards the resistance zone between $80 and $130,000, in line with what I wrote in January in myPerspectives 2021 with entropic methodswhere the upper limit level was $121,000

Bitcoin and the Previous Cycle Top Rule

Due to this rule, I am very skeptical to see bitcoin at $18,000 or even lower in the support price zone. Bitcoin in its history has never tested the price level of the top of the previous halving cycle and if the $29,000 low is confirmed, this rule will not be broken ($29,000 is above the 2017 high at around $20,000).

What would a dip in this cycle below $20,000 entail? Well, that would mean bitcoin’s long-term trend is slowing down and we’ll probably have to wait until the next halving cycle, after 2024, to see a top above the current $64,000. So, as I wrote in the title of this post, we are at a critical moment to understand which scenario bitcoin will go into.

The big picture

Here you can see what I said before, the high of one halving cycle is always lower than the low of the next cycle, I interpret this as a strong bullish signal of bitcoin’s fundamental trend.

To wrap up many of you are probably wondering why on earth did I sell below $29,000 if there was slightly lower intermediate support, well once I set a strategy with a take profit order dragging, I prefer to avoid changing it continuously to adapt to what the market is doing, I had already moved the profit order from $35,000 to $29,000 to contain bitcoin’s volatility and it worked for several weeks and then bad luck damaged me, but it’s all part of trading and I’m not upset at all.