It’s been an interesting week that’s for sure. Lets look, in the previous forecast, three paths were projected:
Up, Down and Over.
The notes were as such: If Up, up fast! then Down. If Down, Down all the way, If Over, slow growth. This is the mantra of all forecasting in a nutshell. After all, there are no other dimensions for a forecast to point. We limit ourselves to these three and assign properties to them as close to physical attributes as possible: Time, Volume, Sentiment. Finally we render our opinion of what goes on next, using previous data as well as other forms of analysis to back up our thought train.
In my analysis tool, I designed it to add probabilities of the three cases, up down and over. I like this method because it really cuts to the chase: What is my opinion? Where do I think it is going? I say it with numbers. 100% distributed among the three possible paths.
In the previous case, I gave the over 50% and the up 40%, and within a day or so changed my perspective that up was going to win, and it did. Further, I called a pullback and was within $20 of the actual reversal. The forecast did it’s job and targets were met. Without a future plan in place, however what does one do when the forecast is pretty much seen through, or otherwise invalidated?
Since completion of the original prediction, volatility entered and caused a significant bounce. And now we have some things to determine — Is this confirmation of the previous H&S bottom and continued uptrend? Are our original low forecasts (the ominous 5k) still in play or what’s in between? or will the corn flatline for the next three months? (Again up, down or over, sir?)
This is why forecasts like these require a perspective that considers multiple time frames. Let’s have a look, shall we?
Both the three day and the 7 day are signaling near term interplay with their Slow EMA bands. This is pretty much a good indicator that we are in a resistance zone because of our pre-existing bear channels.
The traditional chart draws a line that also depicts price being nearby a point of interest:
Lets zoom in on the dragon’s tongue:
A couple things to consider: The initial 8400 peak did not perform to the top of the channel, and the current secondary peak is approaching the top edge. But looking from the larger daily chart we can see that the pullback was quick and the PA is bustling forth upwards. What is to happen when this point of resistance is resolved? This is the premise of my forecast:
I am watching to see what the price does around the 8400–8500 range: Up, Down or Over. Since this is such a decisive place, the least likely is over. Lets refer back to the 3 day and weekly: Historically speaking, when the signal has approached this configuration, a significant bounce downwards has occurred. Does it mean it will happen again? What are the chances of it bouncing up? And over? Nah. I give it a zero percent chance of sideways from this decisive point. Now the hard question — How far down? How far up?
Let us refer to our oracle, the 1 week chart, for our max doom or glory values:
Considering the 2017 run, upward trend line, long term EMA’s It still looks like $5000 bitcoin hovers below. Let us argue points against that potential outcome:
- The longer we stay up here, the higher that point becomes.
- June Halving event is causing the entire market to be bull, and people are buying.
- Inverted Head and Shoulders bottom already occurred.
- Insane amounts of support at 2018 baseline ~6k would require a massive news event to breach.
- Popular multi year charts suggest this is a correction to a larger bull cycle.
While all of these points are valid arguments, a correction to this level is possible. This is really contingent on market behavior in the future. News will drive the price up, the news is Halving. It is set to occur in mid June. Historically there have been exponentially larger bull runs that start before, and continue through these halving events. After June, the next halving is due to occur in 4 years.
I like to view the weekly chart essentially as a 5 point bull flag, we are now approaching point 4, which according to it’s performance, will depict whether or not point 5 will be breached. I’m going to split this forecast 50/50.
- If the price breaks up, it’s probably not going to stop going up. 50%
- If it breaks down, a more symmetrical 5 point flag is possible, and I could see that bottom ranging from 7k to 5k and I will post another article that calls appropriate points to consider once this pivotal moment is reached. 50% UPDATE 1.13.2020 It’s leaning to the downside. It’s also being called “A classic distribution pattern”. I thought a higher high was possible at first but now it look like it cannot get past 8200.
UPDATE 1.14 2020 Appears to be forming a Wyckoff Distribution pattern, entered phase 3 recently:
No price targets this time, let’s just see where our little dragon is headed.
