The purpose of this article is to dissect Bitcoin using the weekly-charts. This may be one of the better/best analyses that you see using this time frame.
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Alright, Now Time for Some Overlay Indicators:
I didn’t see this on the Bitcoin chart until after the sell-off happened (unfortunately) — but this definitely makes the price action make a little bit more sense and indicates to me that this price drop could have been something that would have been caught by TA on the weekly just a couple days prior.
As you can see, the price movement was moving right along that downward Fib channel (Gan Fib Fixed is what its called on TradingView, I believe).
I decided to actually stay on the weekly chart and take a look at the Bollinger Bands as well to get a better feel for what’s going on too.
As noted in the chart above, the Bollinger Bands are showing a ‘tightening’ of the price, which almost always dictates that future price action will be confined to trading within a stricter range.
Now, some of you might be reading that and thinking “what the hell, the volatility on Bitcoin has already fallen off a cliff! You said so yourself in the previous articles, CryptoMedication!”
This is accurate.
However, you have to remember that we are on the weekly charts, not the daily.
Last time I checked, the ATR on the daily is approximately $350. So, that means that you have to multiple this total by 7 (for the seven days in a week) in order to get the average volatility of a week — which comes out to $2450.
Reason for why I said that the price would break out of its ‘channel’ that it’s in.
Check out the visualization below:
Let’s move on.
I’m still on the weekly with this chart here.
I decided to apply the EMA-12, EMA-26, EMA-50, and EMA-100 to get a better idea of how the weekly price is moving against these exponential moving averages (they have been VERY reliable support/resistance points in almost every scenario that I use them in for every cryptocurrency on every time frame as well).
I wrote an article about how awesome EMA is when it comes to support/resistance right here:
Now, let’s examine some important elements in this chart (because there are a few that command attention — and yes, they are very bearish in nature):
The fact that there’s this much price movement from volume this small is fairly remarkable, and it reveals one major detail:
There is a general lack of interest in buying on the Bitcoin protocol.
As mentioned in the beginning of this entire analysis, $20 billion in traded volume (24H) for the entire crypto market is something that we’ve seen well in excess of just a few weeks ago.
However, this was all that was necessary to plunge the entire market.
That indicates to me that it is not necessarily bears that are winning, but bulls and holders that are exiting the market — which is an extraordinarily negative and bearish sign.
While this isn’t something that should render itself as a bearish cross that is as significant as a death cross (EMA-200>EMA-50), it does speak to the overwhelming bearishness of the Bitcoin protocol.
I mentioned this before, but it appears that the bearish sentiment will not be reversing fortunes anytime soon.
Check This Out:
This is stationed right around $5,500 and honestly, based on the price movement of Bitcoin and the market at this point in time, this is far from unreasonable, all things considered.
If you’re a bear, this Ichimoku chart looks beautiful.
The price has broken south of the Conversion Line (red line), Base Line (blue line), and the cloud — which is pretty much the trifecta.
It’s a moot point now, of course, but the bearish cross of the Ichimoku’s moving indicators (base line>conversion line) happened several weeks ago. However, that’s usually the forewarning that shit is about to get ugly.
Might as well check out the regular Fib levels while we’re here, right? Let’s see what they’re telling us:
Bitcoin has already broken through the 61.8% retracement point with virtually zero resistance on the weekly chart (not good).
The 78.6% retracement point (next pivot on the Fib) would be around $4.4k.
So, in conclusion, the Fibonacci is just as ominous as any other indicator for Bitcoin.
Let’s Just Examine the Candles and the Volume
Disclaimer: This is not financial advice. All opinions expressed within this piece are solely that of the author’s and should not be construed as advocacy for any particular trading strategy. Take everything seen above as research and information.
Also, the author does hold a position in Ethereum at this current moment.