BITCOIN The 2 year Volatility Zone shows the correction's bottom

15 ott 2019

This analysis is a complementary piece to a series of studies on combined indicators in an attempt to project where the bottom on the Bitcoin's current downtrend is. See the previous posts at the end of the analysis.

*The 1W MA Buy Zone
On today's study I start again with the MA Support Zone, this time on the 1W chart, which is illustrated by the MA150 and MA200. See how clearly those MA periods provided Support in late 2018 and early 2019, essentially accumulating long term buyers and paving the way for April's aggressive bullish break out. This is the new cycle's Buy Zone and every time the price approaches/ enters it, long term buyers should accumulate.

*The MACD on the logarithmic scale
So based on the current (and/ or past) price action and patterns, when and how will BTC hit this Buy Zone? We saw previously how the RSI points to one last low before the new rise starts and this time I use the MACD on the logarithmic scale. This too shows that based on the 2018 bear cycle, the current pattern that shares quite a few common characteristics with, still has one last dip to make before it reverses.

*The 2018/2019 High Volatility Zone
One would argue that based on the indicator (LMACD) alone, that dip may exceed the MA Buy Zone. I managed to find a correlation that shows the dip can be contained within the Buy Zone. That is the Zone I call "the 2018/2019 High Volatility Zone" (displayed in orange). Basically this is the region Bitcoin has been trading in for the most part of the past 2 years. Since the 2019 rise stopped near that zone's Resistance ($14000) it would be logical to assume that its downtrend (correction) will also stop near its Support (roughly $6000). Notice that the two times BTCUSD broke outside this zone was 1st to make the All Time and previous Bull Cycle High near $20000 and 2nd to make the previous Bear Market Bottom near $3000. Both times the divergence was Symmetrical (around 40%) which is astonishing on its own way.

*The Cycle's Mean
This is symmetrical curved line taken from the middle of the 2018 Channel Down with the intent to provide the mean of the next Bull Cycle. That also supports the idea that the price may make contact with the MA Buy Zone again.


All the above parameters combined show an estimated bottom around the $6000 region and based on the LMACD measurement from the Death Cross, it could be achieved in half the time of the 2018 bear cycle. It goes without saying that all such estimates are subject to a high degree of error to the exact number (Bitcoin's volatile nature doesn't give much room to do so anyway) but not to the general direction. As a result I believe that this is a framework to the right direction for long term traders and investors, who wish to time and/ or scale their buying/ profit taking.


You can see the previous studies on that matter below:

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