- September 10, 2021
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
If you followed me for long here on TradingView and on reddit in the past, then you know I am a big supporter of fractal analysis. As a result I had to bring you today’s fractal comparison and will explain how it can be invalidated even though so far it has been astonishingly identical.
** Fractal similarities **
First of all, this time I haven’t used the log chart, to avoid confusion among people who are not familiar with. The time-frame is on the 1D. I’ve classified the legs numerically from (a) to (j) (nine in total). As you see Bitcoin has currently completed (h) and is going for a dead-cat bounce to (i). So far it has been replicating the January – May fractal extremely closely. The 1D MA50 (blue trend-line) has been supporting (only recently it broke but the price closed back above it), a Higher Lows trend-line of a 45° angle was supporting both fractals until the (g) leg and the Fibonacci retracement levels have been providing Support on the way up. The only minor difference is that the (h) leg has hit the 0.618 Fib while in April it only hit the 0.5 retracement level. Also the RSI is currently at the same level it was when the April fractal was in the middle of the (g)-(h) sequence.
** The difference maker **
So, until now it looks like an excessively identical fractal. However, the big factor that wasn’t present in early May and may make all the difference in the world at invalidating the fractal, is the Golden Cross. As you see, this very bullish MA pattern (when the MA50 (blue trend-line) crosses above the MA200 (orange trend-line) is very close to be formed on this 1D chart. No only BTC wasn’t even close to a 1D Golden Cross in late April/ early May but in fact we haven’t seen this formation since May 19 2020, so over 1 year ago.
If leg (i) materialized next, then most likely that will form the 1D Golden Cross and that alone can be the difference maker as short-term fractals have to abide to the long-term indicators and the 1D Golden Cross is such. If not, expect the (j) leg to find Support around $38000.
What’s your view on that fractal? Do you think it will complete the (j) leg or a potential Golden Cross will invalidate it and break above $53000? Feel free to share your work and let me know in the comments section!