Trading Fam,
It’s been over a year now since I set my expectations of at top at around $125k. I mention that not so that I can be one of those “See, I told you so” guys, but simply as a preface in lending credence to what I am about to surmise, which some of you are probably not going to like.
Since that top was put in, we have formed bear flag after bear flag inside of this larger bullish descending wedge. Recently, we have broken to the top side of this triangle, and today Bitcoin has been on a tear. Over 1 billion in shorts were liquidated within hours. Moonboys are coming back out. Bottom callers are starting to trend.
Are we out of the woods yet? Me thinks not. My bias and target down remain. My reasons are simple. They are as follows:
1. The Pi Cycle Bottom Indicator has not been triggered yet.
In the past, a very good indicator of bear market bottoms on Bitcoin has been something called the Pi Cycle Bottom. That is when the short moving avg (top chart, blue line, 150 days) crosses down over the long moving avg (top chart, red line, 471 days). Every time this has occurred in the past, it has marked the near bottom within weeks/months. It has never failed. This crossover has not occurred yet.
2. The 350-Week SMA has not been touched.
In the past, a touch of the 350-week moving average (orange line, top and bottom chart) has always marked the exact bottom of Bitcoin’s bear market. This has always occurred after the Pi Cycle Bottom indicator has been triggered, but it has always held as bottom support. I am still looking for a touch here. Interestingly enough, this 350-week SMA is currently intersecting with my final downside target of 49-52k!
3. Bitcoin remains inside another bear channel.
Even though a breakout has occurred, the upward momentum was not enough to break the top side of our most recent bear channel. At least not yet. Though this still could occur, price remaining inside this channel keeps this as a bearish indicator.
4. Price usually retests significant resistance/support.
In technical analysis, price will often revisit its breakout/breakdown price of resistance/support. In our case here, that would be the top side of our triangle. I do expect price to come back down and at least retest this previous resistance trendline.
Conclusion: My bias is unchanged. Until the Pi Cycle bottom is triggered, followed by a touch of that 350-week moving avg, my final target down remains 49-52k
✌️Stew