Long Term update: Static Resistance

Monthly Chart

monthly

This is a simple monthly chart since Jan.2012, important facts are:

  • Accumulation zone #2 is above previous one, #1 in the chart
  • The static resistance at $680 is also the 50% of the price swing from the all time high down to the 2015 bottom at ~$150

As i explained in past updates the midpoint or 50% it is one of the strongest and most important resistance/support level. The main trend is obviously up (at least so far) because the low around point 2 in the chart is above point 1 thus is legit to expect a new all time high if this market can break above the $680 static resistance.

Furthermore the fact that the two accumulation zones highlighted in the chart never overlap tell us that the underline long term trend is very strong and because of this i expect a new all time high in case of a strong breakout above $680.

Forecasting resistances

btcusd-mn1-simplefx-ltd

This is a template i use for long term analysis with metatrader 4 platform, first i compute a price regression with 12 or 24 bars/months with a monthly chart then i compute supports and resistances. Dotted lines represents supports/resistances using the recent volatility of XBTUSD, non-dotted lines are levels computed using twice the value of recent bitcoin volatility.

We are exactly at the resistance and this is very interesting because in 1-2 months we will see if bitcoin long term trend is still up or not.

I have taken in account the log-normal distribution of price otherwise i’d have had very bad results in computing the levels, usually it is not required but when prices movements are so high you have to. What does it mean? It’s simple, before doing any calculation first compute the natural log of the price, do your stuff and last reexponentiate the data to have back the price chart with a linear scale.
This is why i do not recommend to use standard bollinger bands with bitcoin on a long term chart, you would have bad results, sometimes with the lower bollinger band going negative! clearly unrealistic.

 

 

 

 

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7 thoughts on “Long Term update: Static Resistance

  1. Chris Ank

    Thanks for the update, Enky!

    From a trading point of view, right now, if one isn’t long, it would be best to wait and see if we break the 680 resistance, yes?

  2. Hi Enky,
    Your end of the year analysis of 5% to surpass 650 USD, and now we’re looking at 680 USD as resistance, is it really only a 3-4% chance that we will break the 680 resistance? I know this is based on technicals, but it seems much more likely we will break it now that we’re so close. Can you share your thoughts on where we’re at now and your end of the year percentages? Thanks again for all that you share. Glad we’re back into some exciting times after BTC was flat for so long.
    Cheers!

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