Those who follow me for quite some time know that I am a frequent user of the Pitchfan method. On this study I present a very interesting approach using this tool that reveals how Bitcoin may trade in the next 4 months!
** The Pitchfan approach ** As you see on the chart I have applied the Pitchfan on the first Higher High and first Higher Low (September 2020) before BTC's parabolic move started (October). The trend-lines that arise and have the most impact (i.e. most hits/ contacts) with the price besides the median (red bold line, 3 hits made) are the 0.618 (red dotted line, 7 hits), the 1.0 (blue bold line, 5 hits) and the 1.382 (blue dashed line, 1 hit). For technical reasons, I have included the 2.0 Fib (black line), which hasn't had any impact though.
** The Red and Green patterns ** I will not describe in detail every contact with those Fib extensions but as you see the patterns that emerged are quite clear and I have displayed them in arc/ curve shapes of Red and Green. I have also included onl for reference purposes the Green Curve that started before the Pitchfan is applied after the March COVID melt-down bottom, but is outside the model, so just keep it as visual.
** The importance of the 1D MA50 ** The price has currently bounced on the Median and the question that arises is will it hold and what will be the next price movement in either case? Well that's where the 1D MA50 (in order not to mix it up with the Pitch lines, I have displayed it in yellow this time instead of my usual blue) may provide the answer. Last time Bitcoin closed a 1D candle clearly below the MA50, was back in September 03, 2020. That was when the Red Curve started.
Does this mean that there are more probabilities to see a Red Curve pattern if the Median breaks? Could be, especially if we assume that the Green and Red Curves follow in turn (one succeeds the other). In that scenario BTC may reach the 100k benchmark by late August. The Green Curve pattern, even though not out of the picture, it is indeed very optimistic and for the same horizon projects a target of around 170k.
But what do you think? Which pattern is BTCUSD most likely to follow, the Red or the Green? Feel free to share your work and let me know in the comments section!
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Please ignore the CCI indicator at the bottom of the chart. It messes up a little the clarity of the trend-lines so just minimize it and zoom more into the chart for a better visual of the Pitchfan model.
If it breaks below, that would mean either a mini bear market or an unprecedented long correction within a longer bull run.
The only historical pattern that fits this is the 2013 "super cycle", where there was a 3 month consolidation with a prior mini "top" before finally moving on to a blow off top. This cycle has appeared to follow that market more than the 2017 market.
So I would hazard a guess that, should we break below 51k, I think it's far more likely we see sideways action until august with another parabolic move through the end of the year and into Q1.
@centralizethis, feels hard to see a blow of top wioth such huge market cap except there is a massive new retail participation. Possible when we ll get back to a steady bullish trend. Not anytime soon thoough.
Offcourse a big correction will bring money and profits back in. But again bitcoin is so mature. can really go off.
long is strong looks nice your analysis. Thank you for sharing.
Crypto-Swing
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Long live the Pitch Fan! What a detailed and well considered treatment of the chart. Well done and thank you. I was struck by the old Sesame Street jingle โone of these curves is not like the otherโ while looking at the last green curve and there are a lot of reasons for it to fall below 50k. ๐โค๏ธ
TecZoon
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Still bullish long term for BTC, but I believe we will do a red curve, I think we are overheated, and the market needs some cooling off, the targets on the red curve will be the healthiest for the long term price and even with all the fundamentals in place, plus all the new people coming into space, they are new and probably lack strong hands, we vets can not hold the price action we had for the last seven months.
MunnikM
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Thank you for sharing this view on long term future. I think there is one big fundamental difference with the past and thatโs the adoption of BTC by financial institutions and companies. In my opinion they have now the power, together with traditional whales, to decide which way we will go. It are not the traditional whales alone that are able to manipulate the market. What is your idea about this new factor, what is acceptable and better for them, credibility for BTC maturity (prise up) or cheap buying more (volatile downwards)?