Sqrt — Trading Ideas on TradingView

Bitcoin and the SQuare RooT (SQRT) Function: Facts, Deductions As my title indicates, this plot highlights facts above all: - Bitcoin price follows "Square Root" channels (SQRT function) - All with an alternation of local Dips (each time higher than the previous ones) and new All Time High (ATH) - These cycle Dip always materialize by an RSI 14 under a value of 34, showing an oversold (see my analysis of 2018-12-18 in link below) - These ATH always materialize by an RSI 14 exceeding a value of 84, showing an overbought - There is a clear correspondence with the Halvings dividing the block rewards by two for the miners, which is a programming of the progressive scarcity of generation of BTC. So much for the facts. Now here are my deductions: - I have extended the layout of the SQRT channels to 2023: we are seeing a tightening of the price there, but beware, we are on a logarithmic scale! All the same, there emerges a new ATH > $ 60,000 followed by a potential local Dip which would remain higher than the current price. - An average of the timing differences observed between the different Dip cycles allows me to consider the point of fall for a next Dip within 20 bars. - This analysis is a little more pessimistic than my previous ones, while noting that it would still not be possible to buy 4-digit BTC (under $ 10,000) from 2022. So those who buy BTC currently will necessarily be winners on HODL. DISCLAIMER: This is not investment advice. Invest only what you can afford to lose. Do not listen to any "prophet" or other "evangelist", it is important that you make up your own mind.

Implications of this breakout for longterm BTC trend So yes, BTC is apparently bullisher than I thought, at least short-term, because longterm I'm always a BTC uber bull :) But short-term, I had several reasons to think that a weekly capitulation bar was very likely: 1. Too much bullishness and optimism (contrarian indicator) 2. Number of daily transactions still below ATH (although now finally approaching ATH level), therefore metcalfe price not high enough 3. Crypto fear and greed index at or above 60 (alternative.me) 4. Weekly and 3d stoch RSI on overbought since ages 5. Drying up volume after a strong impulse move down in an ascending triangle 6. Bearmarkets in BTC like to end with a strong capitulation weekly bar on large volume And most importantly: 7. Cycles getting longer, meaning that the low we had in 2015 in January, would come a few months later, around April-May. But apparently, BTC does something else. That's why one has to love BTC. No matter how long you're in the market, BTC always makes you rethink your assumptions. That's why I was thinking, what implications would it have on the longterm BTC chart, if we'd enter the bullmarket now, the chances of which have increased a lot, especially if the weekly candle closes above 4600. I've drawn two scenarios: One where BTC slows down, every cycle until now was 574 days longer than the previous one. Of course, we don't have enough data points yet, but if we are to extrapolate this, we'd get the next ATH in July 2023 at around 200k. But it seems to me that this theory might be wrong, given that BTC wants to continue the bullmarket prematurely, thus, as fast as the last time, with no signs of slowing down. This would mean that the cycle duration would from now on stay more or less the same: 4 years, strictly governed by the halvings. In anticipation of the halvings, the price already starts to rise at least one year before the halvings, as it seems. Therefore we would get the next ATH at the end of 2021 already, but then not quite as high, "only" around 100k. So, as BTC appears faster and bullisher than I thought, what do you think, will the cycles get longer or not? Both could work out, although the faster breakout here would favor a bit the 2021 ATH version. But then again, the logic dictates that as bigger as something gets, the more "inertia" it should have. Guess we'll need new data points for 2019 :) Now, when is a good time to enter this market? I personally never enter a FOMO, especially not when all indicators are overbought. If indeed the weekly candles continue green and get above the 5k range, it will be good to enter when weekly stoch RSI gets oversold again, after a few strong dumpds, i.e. from 6500 to the 4000 range, provided the logarithmic resistance now acts as strong support. I've written a lot now, but this move here is fascinating, and therefore needs thinking and re-adjustments for the longterm BTC trend might be necessary. Neutral because I wanna see the weekly candle close first to be sure.

Amazing convergence of BTC supports points to a certain price I noticed a crazy convergence of extremeley important supports, at a price range, that I think, will be the strongest support in this bearmarket. The first support being the weekly MA300. The second support being the longterm squareroot function trendline. The third support being the line connecting the 2013 ATH with the China dip. The last one comes from an idea by: Credit to him for noticing this interesting characteristics of BTC, which also held in the previous BTC bearmarkets for estimating the low. All these three extremely solid supports point to a price target of 2000-2500 USD. Somewhere in that range. I don't see it going below these supports for an extended period of time. If, then only very briefly with a very strong rebound.

BTC in the coming weeks, part 2: What supports are important The follow up chart on yesterdays chart, zoomed out a bit, to understand the important supports at play here, and why the MA200 is not the support to look at, as the strongest possible support. We see that the probable future MA200, is quite far above the squareroot-trend. A trend, which has stood since 2010, and has been tested again and again. There is no stronger support in BTC than this one. We see that the MA200 is too far above this support. This means that the MA200 moving average is too fast, BTC has gotten a bit slower. The MA300 on the other hand, will be in a few weeks to months EXACTLY at the Sqrt support! Those two supports will actually be exactly at the same price in the next months !!! At around 2400-2500 USD. This is extremely important! I don't think that BTC will be able to penetrate this support, and close below. Even if it would drop to say 1900-2200 USD, which would be below, the weekly candle would bounce back dramatically and close at least at MA300 and Sqrt support, so around 2400-2500 USD. I think this will form the new accumulation floor in the period before the next halving, say until mid 2020 at the latest. In anticipation of the halving, we'll probably slowly start rising before that, in early 2020 is my estimate. I am long until the weekly in BTC is on overbought, so till the mid 4000s. The weekly RSI also has to come up before the next drop, it was very oversold.> When BTC hits the logarithmic resistance, I will go short. The coming months will represent a huge opportunity, so good luck to everyone!

The support depends on how you like to draw your curves BTC unfortunately is not an exact science. There are multiple supports which all seem valid, depending on whoch starting point you choose back in 2010, and what curvature you take. The result is quite different, some curves are in line with the previous top area at 1200, others are too high for that. Therefore I would tend to speak more of a support area which stretches from 1200 to 2500. Only afterwards will we have another data point to improve our fit. In physics, to do some meaningful fits, you need huge amounts of data. In the end, we would like to have a very high confidence level of 5sigma, to make some meaningful scientific statement. We cannot do that in BTC, because data points are rare. The sigma will increase over time, as more data points will join the fit. For now, we have to just say that: BTC will probably visit an area of 1700 plusminus 500. Huge margin of error. This is just to show that the data still allows to play around and tweak the lines to fit the narrative of the respective idea :)