The good, the bad and the ugly
In this episode of NewsBTC’s daily technical analysis videos, we look again at the Bitcoin BTCUSD monthly chart now that the August monthly candle has closed and we finally have new data to analyze.
Check out the video below for the good, the bad and the ugly.
VIDEO: Bitcoin (BTCUSD) Price Analysis: September 1, 2022
In yesterday’s video, we focused on the nail-biter of a monthly close we had last night, where bulls barely managed to hold on to support. With a new monthly candle open, today’s video attempts to see where the crypto market is headed, if the bottom is in, or if we will see an extended accumulation phase.
August Aftermath: How Did the Bitcoin Monthly Candle Close?
Bitcoin managed to close above previous all-time high resistance turned support. This is the good news in the analysis, as you could imagine. The bad news is that Bitcoin has lost what has previously been referred to as the Coinbase streak.
Trendlines are subjective to a point, and there is a chance that a long-term trendline is still held by a hair.
There are several trend lines to watch currently | Source: BTCUSD on TradingView.com
Technical update with Bollinger Bands, Ichimoku and more
A hopeful note is that the monthly stayed within the lower Bollinger Band. Closing out could have led to an extended decline – much like previous uptrenders continue to ride the upper band after a strong breakout.
The monthly Ichimoku also gives bulls more hope, or is simply a belated look at the inevitable. The tenkan-sen is still above the kijun-sen, and the kijun-sen has started to move up.
However, the lines have usually crossed on monthly before Bitcoin has bottomed, which may indicate the bottom is not. Cloud contortions are also particularly noteworthy and have previously indicated a trend change. We won’t see a cloud turn until November 2022 at the earliest, which suggests that Bitcoin may spend more time going down or sideways before we see a major recovery.
We might not have found a bottom just yet | Source: BTCUSD on TradingView.com
Time for a possible turning point in crypto winter
The monthly Fisher Transform has yet to turn bullish. The tool is useful for finding precise turning points in market cycles. The tool continues to descend towards an upward trend line which is another signal that Bitcoin has a long bottom like the bear market of 2014 and 2015.
The monthly relative strength index is at the lower boundary of an ongoing downtrend channel. The bottom of the bear market in 2018 barely touched the trough, while the bear market in 2014 and 2015 spent time grinding along it. This monthly close gave us our second push on the line and could suggest similar behavior to Bitcoin’s first bear market.
Another potentially positive sign is that the LMACD has reached a possible upward trendline that could provide support for where the momentum starts to turn upwards again. The month of September and every month forward must turn pink on the histogram to indicate weakened bearish momentum, and the bull trend will be confirmed with the histogram crossing the zero line and turning green.
We also take a closer look at this cyclical behavior in Bitcoin | Source: BTCUSD on TradingView.com
Basic Case: Is It Crazy to Buy Bitcoin Here?
Even the monthly chart using Bitcoin fundamental tools looks pretty ugly. On monthly timeframes, the hash bands have yet to properly issue a buy signal despite the signal being triggered every day. Bitcoin is also above the lowest point for production costs – a metric that analyzes the cost miners have to produce each BTC on average.
The 2018 bear market closed a monthly candle below the low point of the average. It is worth noting that even though it was this key just below it during the last crypto winter, the downturn was already in when it happened. This may indicate that Bitcoin will trade sideways and accumulate at such prices for a while longer, but $17,500 may ultimately hold as the bottom.
We also take a closer look at this cyclical behavior in Bitcoin | Source: BTCUSD on TradingView.com
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Featured image from iStockPhoto, Charts from TradingView.com
