- June 24, 2022
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
Following the ‘back to basics’ analysis on Bitcoin (BTCUSD) and the reminder that the Parabolic Growth Channel is still dictating its long-term cyclical trend, I thought it would be useful to extend it a bit with new parameters.
** The Parabolic Rally and Bear Cycle Resistance elements **
As you see, I’ve incorporated new measurements on Each Cycle, namely the Parabolic Rally (green) measuring the most aggressive part of the Bull Cycle and the Bear Cycle Resistance (red), which is the Lower Highs trend-line that keeps all price action (practically the whole Bear Cycle) below it until it breaks and the Bull phase starts.
** Angles’ symmetry **
What those factors show is that each move holds a certain symmetry. Every Parabolic Rally has so far been roughly on a 60° angle (or at least this is on my chart adjustments, if yours are different it will change but again the angle will change proportionally on all trend-lines). Similarly, the Bear Cycle Resistance has been approximately on a 25° angle. We can see that this analogy held perfectly for the previous Parabolic Rally (October 2020 – April 2021) therefore enabling us to assume that the pattern could continue for the Bear Cycle Resistance.
I have applied that Resistance and this gives us a slight idea of when to take a confirmed Buy position once it breaks after the bottom is priced and the trend starts moving upwards again. As you see, the 0.382 Fibonacci Retracement level from Cycle Top to previous Cycle Bottom, has always been a good estimation as to where the new Cycle may price its Low and right now we are trading exactly around it.
** Cycles comparison **
Also, for better illustration purposes and a cleaner comparison, I’ve put all prior Bear Cycles (including the current one) on top of each other, drawing the same Bear Cycle Resistance. You can see with this analogy just how proportionate each phase is and how close the bottom might be.
So do you find this approach useful? Based on that are you willing to buy now or after the Resistance breaks? Feel free to share your work and let me know in the comments section below!