Daily Crypto Technical Analysis August 22, 2022: Bitcoin Price (BTCUSD)
Welcome to the first episode of NewsBTC’s brand new daily technical analysis videos. In the first episode, we look at Bitcoin price action using the weekly BTCUSD price chart.
Specifically, this episode looks at Bitcoin’s “most profitable buy signal” in its entire history: the hash bands. Additionally, we analyze weekly momentum using the logarithmic MACD to try to understand if a bottom might be in. Take a look at the video below.
VIDEO: Bitcoin (BTCUSD) Price Analysis: August 22, 2022
All about the Hash Bands
The hash bands were created by Bitcoin analyst Charles Edwards. They are a pair of moving averages based on Bitcoin hash rate and mining difficulty, and signal when miners capitulate. When this phase ends, a buy signal is given. In fact, the buy signal has been called Bitcoin’s most profitable buy signal, producing several thousand percent returns on average every time it’s triggered. The signal is even more profitable when it appears before a Bitcoin halving
The hash ribbons have triggered a buy signal | Source: BTCUSD on TradingView.com
With the hash bands, the buy signal on the daily, weekly time frames becomes more interesting in anticipation of a possible bottom. Although a bottom may already be in, historically the market has continued to pull down even after the hash band’s buy signal.
Measuring momentum with LMACD
Yesterday brought us another weekly close in BTCUSD. In particular, we will use the logarithmic MACD in our analysis. The log version of MACD provides better comparative analysis across previous cycles.
Although the MACD had opened green the previous week, the end-of-week sell-off rejected the bullish crossover and has forced momentum sideways. The weekly MACD is on historical bear market readings. Deviating further down would be unprecedented and likely take Bitcoin down below $17K.
Will momentum cross upward? | Source: BTCUSD on TradingView.com
But if bulls can complete the bullish crossover, the change in momentum in previous cycles was enough to kick-start a bullish impulse. MACD is currently one of the most important indicators to watch on weekly time frames. Although a bullish crossover can confirm the bottom, the MACD is gaining a reputation for being a lagging indicator, and therefore the bottom can be in long before the bull crossover confirms.
The ten-year trend line
To lend credibility to a potential bottom, Bitcoin Weekly is sitting on a long-term trend line that lasts over a decade. The long-term trend line has been touched on 5 separate occasions, including the bottom of the bear market in 2014 and Black Thursday in March 2020. Losing this trend line could be disastrous for the cryptocurrency market.
Will this nearly ten year long trend line hold? | Source: BTCUSD on TradingView.com
Learn crypto technical analysis yourself with the NewsBTC Trading Course. Click here to access the free educational program.
follow @TonySpilotroBTC on Twitter or join TonyTradesBTC Telegram for exclusive daily market insight and technical analysis education. Note: Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com
