BITCOIN entered a Buy Zone holding since April 2013.

20 may 2022

On today's Bitcoin (BTCUSD) analysis, I am bringing to you a fresh long-term perspective on the 1W time-frame using the Fibonacci Channel and its retracement/ extension levels. It is a Channel Up as you see and its start is on the Low of the April 08 2013 1W candle.


** Creating a 9 year Buy Zone **
The Top of the Channel is on the November 25 2013 peak of that Cycle. As you see, all the Cycles and price action that followed since then has seen the Zone within Fib 0.0 and Fib 0.236 as the ultimate Buy Zone being valid for 9 years running. In fact during the previous Bear Cycle (2018) the price dipped only marginally below the 0.236 Fib as its was the 1W MA200 (orange trend-line) that provided the necessary Support and formed the bottom.

It was only during the Black Swan event of the March 2020 COVID global meltdown that the price pierced through but still rebounded just above the Fib 0.0 (bottom of the Fibonacci Channel Up) and the 1W candles closed only marginally below the 1W MA200. That was the case also with the Jan 12 2015 and August 24 2015 Lows, they broke but closed on or above the 1W MA200, showcasing why it is the ultimate buy spot within this 9 year Buy Zone.

Notice that, excluding the COVID crash of March 2020, the 0.236 Fib has made perfect hit and hold actions as Support 5 times since December 2018.


** The Zone of Frustration **
Since the January 03 2022 1W candle, Bitcoin has been trading (closing) entirely below the 1W MA50 (blue trend-line). I have labelled the periods of price action within the 1W MA50 and 1W MA200 as the 'Zone of Frustration' where traders start to get confused at best or lose complete faith in the market. Right now it seems that we are approaching the end of this period. Notice how this is normally marked by a strong rejection on the 1W MA50 (March 28 2022 and July 30 2018 1W candles. In 2014, it was a near rejection on the November 10 2014 candle).


** The Rally Zone **
The 0.236 Fib is also key on another aspect of this Channel. In 4 times during these 9 years, it has marked all major rally phases. Basically it is at least the 0.236 - 0.618 Fib Zone that is dominating most parts of those rallies. Naturally that means that, if it holds, it can give a new rally in the coming months towards the 0.618 Fib.


** Conclusion **
This model shows that 1W candle closings above the 0.236 Fib of the Channel most likely indicate that this will be the new Support. Last week's bounce above it, adds more weight to this argument. Regardless of that, Bitcoin successfully entered this Buy Zone since 2013, so based on the above parameters, it is already a strong long-term buy with the only condition left to fulfil is hitting the 1W MA200.

Do you think this is bound to happen in the next few weeks? Are you waiting until then or do you consider the break into this 9 year zone as a good enough buy opportunity for you on the long-term? Feel free to share your work and let me know in the comments section below!



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