Well, it has been over a month since I have posted a Bitcoin update. Part of the reason is that there hasn't been too much going on with Bitcoin. I have also been extremely busy writing articles for Benzinga. I know, I am just trying to justify my laziness, I probably could have found the time. Anyway, as I said not too much has been going on with Bitcoin, the price has been in a downtrend ever since setting a new all-time high on November 10th.
Bitcoin 4-hour Chart
We'll take a look at the 4-hour chart first. This chart is showing from December 3rd when we got the big price dump. Since then the price of Bitcoin has been really just been moving sideways. Bitcoin bounced from the low of the big dump and hit a high of almost $52 but has been in a slight downtrend ever since.
Yesterday afternoon the price bounced from a low of around $45.5k and has moved higher by about $3k. What I want to see the price do from here is to start breaking above the lower highs that you can see to the left. The first was set on the 15th at $49.5k, the second was set on the 12th at $50,777. Ideally, Bitcoin will keep pushing higher and break this downtrend.
Bitcoin Weekly Chart
Looking at the weekly chart the dump from the all-time high is even more pronounced. What I will be watching is how strong Bitcoin is moving forward. The weekly pattern worries me a little, it looks like the possibility exists that it could complete a Head and Shoulders pattern. You can see that the left shoulder and head have already formed. If Bitcoin pushes up to around $53k and rolls over it could form the right shoulder. After that, a break of the neckline would not be good. If an H&S pattern is confirmed and a break of the neckline occurs the measured move would put the price of Bitcoin down near the 2017 high.
My hope is that this pattern does not complete and that Bitcoin can either keep slowly moving higher or trend sideways for a while which would invalidate the H&S pattern. It's pretty obvious that this cycle seems to be much different than past cycles. In my opinion, if Bitcoin can just at a minimum hold around $50k and build a strong base that would be very bullish. After that, I would like to see a steady slow climb higher. I think that there is a possibility that this market cycle could be much longer than past cycles. It would be nice to see it last well into 2022.
Basically, we are all just along for the ride so all we can do is watch it play out.