Bitcoin (BTC): The Analogs We are Following

April 2, 2019 / by Bill Noble

Now that it is finally “game on” in Bitcoin (BTC), we are following two analogs to help map the way forward.

The first is an analog that shows how the consolidation before the recent up move is the mirror image of the consolidation that preceded last year’s down move (Figure 1).

 class= Figure 1

The consolidation before the recent up move was almost the same duration as the consolidation before last year’s down move (89 days). The number 89 is significant because it is in the Fibonacci series.

In both cases, once Bitcoin (BTC) left the 89-day consolidation, there was a small counter-trend move before the major trend started (Figure 1, red arrows).

With this particular analog, after today’s up move, there may be a five-day consolidation phase before the next leg up. That five day consolidation period could conceivably contain a new high for the move that sucks in weak longs. So, maybe hold off on buying strength in Bitcoin (BTC) after today and see if there’s a dip in the week.

All year, we have harping on how Bitcoin (BTC) has mirrored a Wyckoff bottoming scenario.

That scenario shows that Bitcoin (BTC) has exited a long accumulation phase. The Wyckoff scenario points to a slightly longer period of consolidation than the analog above.

Based on the Wyckoff analog for Bitcoin (BTC), $4,528 is a key level to watch below the market (Figure 2).

 class= Figure 2

Bottom Line: The HODLers have defeated the miners (sellers). If you can buy Bitcoin (BTC) on a dip after a period of consolidation and make money, a much bigger up move may be unfolding.

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