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Bitcoin Macro Consolidation Continues
Bitcoin continues its macro consolidation. It continues to be sandwiched inside the black 0.5 Fib Curve support and the blue 0.236 Fib Curve resistance.
Though it hasn't yet on the Monthly, the black 0.5 Fib Curve has flipped into support last month on the Weekly timeframe:
This is a technical step that BTC needs to exact when it comes to confirming the 0.5 Fib Curve as a higher timeframe support. The successful Weekly retest is a good sign but if a Monthly retest occurs - that would be even better.
The black 0.5 Fib Curve support represents the price point of ~$57200 at this time which is approximately confluent with the Monthly level that Bitcoin was able to Monthly Close above this past October:
The green Monthly level, which figured as resistance earlier this year, may very well figure as new support upon a retest attempt.
The Monthly level represents a price point of ~$58700 whereas the black 0.5 Fib Curve level represents a price point of ~57200. Great confluence.
But this confluence suggests that, should BTC dip towards the Monthly level, it probably wouldn’t be a picture-perfect retest.
In fact, BTC could produce a volatile downside wick below the green Monthly level of ~$58700 in order to satisfy the black 0.5 Fib Curve retest of the ~$57200 level.
In any case, that area is likely to figure as a strong demand area, should a dip occur.
Historically, this dip to the black 0.5 Fib Curve tends to happen, whether in a very non-volatile way like in 2013:
Or whether in a very volatile way, even deviating to the downside to as low as the next immediate Fib Curve below the black 0.5 Fib Curve like in 2017:
What’s interesting about this current period of price action for Bitcoin inside the black 0.5 Fib Curve and the 0.236 Fib Curve is that BTC is spending a decent amount of time consolidating here:
It’s been consolidating here for weeks and perhaps the only comparable example of extended consolidation inside these two Fib Curves was back in 2013 when BTC actually distributed from here after consolidating for like 5 weeks:
This consolidation was of course much more volatile, occurring after a parabolic uptrend which preceded a mid-cycle correction.
This current BTC consolidation is a lot more stable and finds itself in a period of re-accumulation following a successful recovery from its own mid-cycle correction:
The other thing to take note of is that the blue 0.236 Fib Curve isn’t a strong resistance, historically speaking.
Yes, it will reject price on the first time of trying, but it will reveal itself to produce limited downside, much like it did in this cycle as well.
After all, BTC upon contact with the blue Fib Curve retraced only -14% and has since almost actually revisited said Fib Curve resistance.
A dip from these highs would certainly be able to fuel a break beyond the blue 0.236 Fib Curve resistance; the only question is whether BTC needs to that to happen, or does it already possess the strength to break this Fib Curve without a dip.
When Could Bitcoin Peak? When Could Bitcoin Bottom In Its Next Bear Market?
But let’s look forward into the future.
Let’s even look beyond this current Bull Market.
Let’s look to as far as the next Bear Market bottom.
Because it is quite possible that the next Bear Market bottom will actually take place at approximately current price levels:
Let’s discuss this by first reiterating the basic principles about this log channel:
- Top of the Channel (i.e. Red Fib Curve) = Bull Market Peak
- Bottom of the Channel (i.e. Green Fib Curve) = Bear Market Bottom
So whenever Bitcoin peaks in its current Bull Market, the current price level of ~$63000 would represent the Bear Market Bottom in April 2023.
After all, the bottom of the log channel represents Bear Market Bottoms and so if current price levels are to figure as such in the future, then perhaps we already have an estimate as to how long the Bear Market could last.
The longest Bear Market lasted some 58 weeks or so (2013/2014), with the 2018 Bear Market coming in at a close second of around 51 weeks in length.
So if a Bear Market lasts approximately a year (~52 weeks) and the ~$63,000 region is to figure as possibly the next Bear Market bottom, then by working backwards we could surmise that this Bull Market peak could extend to late Q1 or early Q2.
However, if in fact the current All Time High figures as the new floor in the next Bear Market, here’s what things would look like:
Bitcoin would bottom in its next Bear Market in mid-May 2023, right in the thick of Quarter 2, 2023.
In which case, working backwards by approximately one year (i.e. 52 weeks), Bitcoin could therefore peak in its current Bull Market in early Q2 or so.
Of course, we’ll have a better idea of when the Bull Market peak is getting closer the closer BTC gets to the top of the channel. And by the same token, with more information, we’d be able to denote the next Bear Market bottom with better precision.
But with the incomplete information that we have at our disposal right now, this is very roughly the state of things.
In the meantime, Bitcoin is simply meandering, re-accumulating in the middle of its log channel, suggesting that it is only just about ready to end its mid-cycle period.
Bitcoin hasn’t begun its second, more parabolic part of the cycle.
Thank you for reading.