Table of Contents
Do not index
Do not index
The 20-Month MA
Let’s unpack this chart in more detail.
First of all - BTC tends to retrace anything between -46% to -63% below the 20-month MA.
Right now, BTC has retraced -43% since losing the 20-month MA.
Interestingly, the -46% mark which we saw in the March 2020 COVID crash would align with the ~$22000 price level which is where the 200-week MA is located (this is an MA that has offered solid support in marking Bear Market bottoms):
However, going back to the 20-month MA…
Retracement Depth
We’ve seen -46%, -52%, and -63% retracements below the 20-month MA.
Here is a list of what prices those retracements correspond to:
- 46% —> ~$22000 (confluent with 200-week MA)
- 52% —> ~$19000
- 63% —> ~$15500
What’s interesting about all of these figures is that they tie in with figures that emerged from my historical analysis of Death Cross retracements.
But we also know that BTC doesn’t stay below this MA forever.
Time Spent Under The 20-Month MA
In the past, BTC has spent less than a week here (March 2020), two full months in 2018, and four full months before finally bottoming.
Right now, in this cycle, BTC is now in its second month below the 20-month MA.
I think that by the four-month mark below the 20-month MA, we’ll have a much clearer portrait of a Bitcoin bottom.
Signs to look for: long downside wick, extended sideways action at lows.
Timing the bottom isn’t that important to me, but we are certainly in a period where a general macro bottoming is going to be occurring in the coming months.
Which leads me to my next point…
Time From Cycle Top To Cycle Bottom
If we look to the 2013/2014 Cycle Top, it took 426 days to finally bottom in the 2015 Bear Market.
If we look to the 2017 Cycle Top, it took 365 days to bottom in 2018.
From the Top in June 2019 at $13900, BTC then saw 274 days of downside before bottoming.
So if we are to assume that November 2021 was the Cycle Top and say that this current Cycle Bottom will take place in a) 274 days or b) 365 days…
This comes around to the Cycle Bottom taking place in September 2022 or November 2022.
But this is where we need to challenge the 274 day period as that wasn’t a full cycle. So through the process of elimination, we shouldn’t technically consider this 274 day period in trying to denote this current Cycle Bottom.
So November 2022 then?
If we appropriate the 426 period from the 2013/2014 cycle to this current cycle, then that would mean that BTC could bottom by January 2023.
Which would essentially point to BTC forming a generational bottom via a lengthy multi-month consolidation period and this would suggest that BTC could spend the longest time below the 20-month MA in history.
Is it wise to pay attention to time?
Time is a relevant factor only in the context of the BTC Halving.
So let’s look to RSI values on the Monthly timeframe to tie this all together:
Bitcoin RSI Bear Market Bottom values occur some 486-547 days prior to the next Halving.
Interestingly, this would mean that BTC could bottom between October-December 2022 which shares some alignment with the 20-month MA time analysis of September 2022-January 2023.
In any case, the most important thing to focus on is the technicals, while casting an eye on timing in the context of the Halving.
We are getting close to an absolute bottom, we are currently in a bottoming out period, but this will take time to fully transpire.
One of the technicals to pay attention to is the aforementioned RSI indicator which is now entering the Bear Market Bottom area. It’s just June but we’re already seeing the technicals signal that some sort of bottom is near.
The time analysis here may simply suggest that the bottoming out period may be lengthy via some multi-month consolidation period, but that the absolute bottom may happen much sooner.
In any case we must pay attention to:
- Bear Market Bottom RSI
- Retracement Depth and Time Spent below the 20-Month MA
- Arrival at and possible downside wicking below the 200-week MA
But also…
The Bitcoin Log Growth Curve Channel breakdown.
Previous March 2020 breakdown was brief but -49% in depth.
BTC has broken down from the Channel once again but is -31% down.
A -49% breakdown would translate into a ~$17000 price for BTC.
BTC historically hasn’t spent much time below the Channel at all and so paying attention to BTC in times like these will likely pay dividends over the long-run.
Thank you for reading.