A Bitcoin Bear Speaks Out

My first Bitcoin technical review
BTC -7.9% in March 2018 “A Technical Lesson In Bitcoin” I explained how I felt that the technical methods that I have used for decades on stocks, bonds and currencies could also be useful in determining the trajectory of Bitcoin.

In that article, I used pivot analysis to point out that I thought the wildly bullish forecasts of a rise from around $8,500 to over $30,000 were off the mark. As it turned out in December 2018, it had a low of $3251. For me, basing a price estimate on actual data has always been the best strategy.

In April 2022, although Bitcoin has fallen 20% from its annual pivot to $48,259, I saw the headline “Experts Say Bitcoin Could Reach $100,000…”, so in my opinion this warranted a new unbiased technical assessment.

My outlook then was negative, and that has been maintained in the several follow-up articles listed at the end of today’s entry. In early October, after Bitcoin had moved higher for two consecutive weeks, I was unimpressed when shown a new Bitcoin futures chart from my colleague Jerry A.

Several of my previous articles are highlighted on the chart along with some of the key technical indicators. One is the 20-week EMA which is programmed to be yellow when it declines as it has been since the March high. As the rally peaked in August and bullish sentiment increased, Bitcoin stopped well below this level.

Prices closed this week below the starc band, meaning it is oversold as it was twice before this year. This allows for some sideways action or even a short bounce before there is a further decline. The June 2019 high is at 13,826 with QPivot support at 13,764, so that is likely the next downside target. The annual S2 grant is $7,774.

VolConfirm, which combines OBV along with other volume indicators, turned negative in the spring (see chart) and tried to improve before last week’s high volume decline. Typically, a weekly volume bottom takes at least 3-6 weeks to form, while technical rallies often only last two weeks.

AsprayInsight analyzes the relative performance of Bitcoin against the S&P 500. It has been negative all year, meaning that Bitcoin is underperforming the S&P. Successful investors and traders want to concentrate on markets that are performing stronger and not weaker than the S&P 500.

Currently, a weekly close above $21,593 is needed to stabilize Bitcoin’s price. My sympathies are with anyone caught up in last week’s cryptocurrency disaster, as there is no comfort for me when my bearish forecasts are correct.

Here are Tom’s previous Bitcoin articles

Key Bitcoin Levels to Watch

A bear market rally in Bitcoin?

Is Bitcoin’s Rally Over?

Bitcoin – Follow the charts, not the hype

Do Bitcoin and Gold Still Look Vulnerable?