Long Term Update: Critical Point

It is always better to look, as I always say, at larger time frames to understand how to build a winning operating strategy. I invite you first to look at this monthly chart of the BTCUSD, before commenting it.

BTCUSD Monthly Chart with Kama Roof/Floor price zones

We are clearly compressed in a price range well defined by the monthly average that defines the equilibrium point of this halving cycle (2020-2024) and an intermediate level with reduced volatility (around $28,000).

A Failure to move and to stay above the monthly Kama average would be bearish in my opinion and it would clearly be followed by a decline to the support zone of this halving cycle, between $11 and $18K.

With a confirmed break of the monthly average above $40,000 then the view would change and bitcoin would return to a position of strength that should bring it towards the resistance zone located between $80 and $130,000, in accordance with what I wrote in January in my “2021 outlook with entropic methods” where upper bound level was 121,000$

Bitcoin and the top of the previous cycle rule

Because of this rule i’m very skeptic to see bitcoin at 18,000$ or even lower inside the support price zone. Bitcoin in its history never tested the price level of the top of the previous halving cycle and if 29,000$ bottom is confirmed this rule will not be broken (29,000$ is above 2017 Top at around 20,000$).

What would a bottom in this cycle below 20,000$ imply? Well, it would mean that bitcoin’s long-term trend is slowing down and we would probably have to wait for the next halving cycle, after 2024, to see a Top above the current one at $64,000. Thus, as i wrote in this post title, we are at a critical point in time to understand what scenario bitcoin will go into.

The Big Picture

BTCUSD Monthly Chart since first halving

Here you can see what I said before, the Top of a halving cycle is always lower than the bottom of the next cycle, I interpret this as a strong bullish signal of the fundamental trend of bitcoin.

To conclude many of you are probably asking why the hell i sold below 29,000$ if there was an intermediate support slightly lower, well once i define a strategy with a trailing profit order i prefer to avoid to continously change it to accomodate what the market does, i had already moved the trailing profit order from 35,000$ down to 29,000$ to contain the volatility of bitcoin and it worked for several weeks then some bad luck damaged me, however this is all part of trading and i’m not upset at all.

26 thoughts on “Long Term Update: Critical Point

  1. CryptoPeach

    Thank you for the well-thought out update. Taking into account that there was some back luck, will you wait for the monthly kama average to go above 40k to reenter and “free roll” to see where bitcoin goes or dive in?

    1. I don’t think so, having been a miner back in 2010-2011 I’m not completely out of this market.
      I will not leave you alone, if I’ll see a good buying opportunity I will inform you guys with a trading alert.

  2. notice

    dont miss out; buy btc to the moon 😛
    No seriously looking quite bullish now. Its relatively save to assume enky thinks similar, since his criteria (monthly close above support is met)… correct me if im wrong.

  3. Aglio

    BTC following China real estate? Collapse – a dream for west to blame China or will China bailout… Is a massive global correction long overdue?!

    1. No guys, i’m on a break from trading, that’s all. Aniway the situation is unclear, 15 days ago btc made a high lower than the previous one (april 2021) and this means that for now the trend is not bullish, so it is difficult also for me to understand if there will be a new all time high for the end of the year or not.

    1. Hi, hard to say, there are times when even for me it is difficult to say what will happen. The situation in general is bullish, reasoning on the weekly chart there is a nice resistance at 70 thousand $$ (kama bands), I think it will work and we could see some profit taking between 60 and 70 thousand dollars. On the daily chart resistance is close, 52k, watch out this level too! Bye

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