Hello Friends!
Welcome to the first ever issue of Data Bites, part of the Bitcoin Data Newsletter. Usually, we will be covering a unique chart here, but today’s find from my Twitter post was so profound I believe, I could not resist to cover in in depth here!
Let’s jump into it!
Data Bites Will Cover…
Short Term Observations - Bitcoin might need some time…
Market Comments - Are most people bearish or bullish?
Weekly Review - The DXY calls for a Bitcoin parabola
Short Term Observations
Bitcoin might need some time…
For 26 Days now, Bitcoin has been trading within the confines of a parallel channel. Attempts to break to the upside or downside have been met with swift rejection.
Overall however, I would say Bitcoin had fiercer attempts to break through the 31k mark than it has the 30k mark so far… which might mean that the support is starting to weaken.
Price is hovering around the bottom of the channel, and actually is now trading below it. The hope is now that price will create a fake out of the lower portion of the channel, similar to what happened to the upside when Bitcoin made new yearly highs above 31k.
Some bullish divergence is also developing on the 1hr time frame for RSI, something that we haven’t seen in the entire time Bitcoin has spent inside the channel. Could this lead to a fake out? Possibly… 1hr divergences do not carry the importance of higher time frame counterparts like the 4hr and especially the Daily which is seeing bearish divergence.
I am remaining hopeful that a fake out is the case, but the breakthrough the bottom of the channel does prefer downside so this is something to be aware of for the short-term.
Higher time frames have not confirmed a breakdown.
Market Comments
Are most people bearish or bullish?
This is a question I see fought over a lot currently amongst Twitter analysts. We often times try to determine the majority think because it can serve as a counter indicator to the direction the market might take…. sometimes.
I think this is much more effective on a long-term scale, but for short-term movements in can be hard to predict what will happen just on the majority think alone.
But, according to a poll I ran on Twitter with 526 votes on July 17th, most people are bearish. Does that mean that price cannot move lower? Certainly not. It is most definitely still possible that price sees further decline before trying to break through the 31k mark again.
Amongst short term analysts (not myself), I do notice more of a bearish presence in expectation, I can see why this would be the case with price running into strong resistance and given some technical clues.
For my thoughts for now, I am being patient to see if this develops into a fake out or full-scale breakdown.
Weekly Review
The DXY calls for Bitcoin parabola
This is one of the most interesting finds I have come across in quite some time. The indicator shown above (blue) is the Bitcoin DXY correlation coefficient which measures how correlated Bitcoin is to the Dollar.
Extracting the information on the Weekly time frame produces some very spectacular results. For this observation we are focusing on the Low Correlation area.
During a given market cycle, the correlation coefficient enters this zone in 3 phases:
PURPLE - The first move into the zone comes slightly before the bear market bottom.
RED - The second move into the low correlation zone marks the end of the bear market, or the bottom of the cycle.
GREEN - After some time, the metric returns to the low correlation zone, this is the start of true bull market parabola.
And… there are no false signals when viewed in this way, extremely interesting! I have reviewed some other observations that allude to this, but not to this level of preciseness and caliber.
Another interesting part of this, it is during the true parabola, by definition according to healthy bull market support. You can see this in a recent tweet here.
And this is from an outside factor, the Dollar. Meaning that the strength of the US dollar has great influence on when Bitcoin parabola takes place. So what does this even mean?
I believe this could look something like a 2013 cycle. If we are indeed expecting an early powerful bull move, this could come in the form of two curves. The first comes early and would probably end sometime in 2024. The second comes later and ends late 2025 according to my Nov 28th Cycles Theory. Both of these concepts are discussed in a recent issue of the Bitcoin Data Newsletter, “Will Bitcoin See an Early Top?”
As for the price target of this parabola, I will speak to the first one. Personally, I would expect it to come just over or short of ATHs. The secondary later top at 90-130k which is my personal range and projection for the cycle. The upper target according to my Trend Pattern Price Model also mentioned in the newsletter above.
So regardless of the short term, big things are on the horizon for Bitcoin according to data. And maybe…. just maybe… you might not have to be as patient as you expect for it.
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Thanks for reading this edition of Data Bites, I hope you enjoyed and leave any comments or questions you have for me, and I will do my best to get back to you!
See you again next week!
Best Wishes,
CryptoCon
Unable to tell if I have a subscription, which I believe I paid for 2 weeks ago. Kindly advise.
good job bro