Bitcoin and the SQuare RooT (SQRT) Function: Facts, Deductions
Updated
As my title indicates, this plot highlights facts above all:
- Bitcoin price follows "Square Root" channels (SQRT function)
- All with an alternation of local Dips (each time higher than the previous ones) and new All Time High (ATH)
- These cycle Dip always materialize by an RSI 14 under a value of 34, showing an oversold (see my analysis of 2018-12-18 in link below)
- These ATH always materialize by an RSI 14 exceeding a value of 84, showing an overbought
- There is a clear correspondence with the Halvings dividing the block rewards by two for the miners, which is a programming of the progressive scarcity of generation of BTC.
So much for the facts.
Now here are my deductions:
- I have extended the layout of the SQRT channels to 2023: we are seeing a tightening of the price there, but beware, we are on a logarithmic scale! All the same, there emerges a new ATH > $ 60,000 followed by a potential local Dip which would remain higher than the current price.
- An average of the timing differences observed between the different Dip cycles allows me to consider the point of fall for a next Dip within 20 bars.
- This analysis is a little more pessimistic than my previous ones, while noting that it would still not be possible to buy 4-digit BTC (under $ 10,000) from 2022. So those who buy BTC currently will necessarily be winners on HODL.
DISCLAIMER: This is not investment advice. Invest only what you can afford to lose.
Do not listen to any "prophet" or other "evangelist", it is important that you make up your own mind.
- Bitcoin price follows "Square Root" channels (SQRT function)
- All with an alternation of local Dips (each time higher than the previous ones) and new All Time High (ATH)
- These cycle Dip always materialize by an RSI 14 under a value of 34, showing an oversold (see my analysis of 2018-12-18 in link below)
- These ATH always materialize by an RSI 14 exceeding a value of 84, showing an overbought
- There is a clear correspondence with the Halvings dividing the block rewards by two for the miners, which is a programming of the progressive scarcity of generation of BTC.
So much for the facts.
Now here are my deductions:
- I have extended the layout of the SQRT channels to 2023: we are seeing a tightening of the price there, but beware, we are on a logarithmic scale! All the same, there emerges a new ATH > $ 60,000 followed by a potential local Dip which would remain higher than the current price.
- An average of the timing differences observed between the different Dip cycles allows me to consider the point of fall for a next Dip within 20 bars.
- This analysis is a little more pessimistic than my previous ones, while noting that it would still not be possible to buy 4-digit BTC (under $ 10,000) from 2022. So those who buy BTC currently will necessarily be winners on HODL.
DISCLAIMER: This is not investment advice. Invest only what you can afford to lose.
Do not listen to any "prophet" or other "evangelist", it is important that you make up your own mind.
Trade active
In summary :Short Term Target : $ 5,900 in 3 months (Halving + weekly MA 200)
Long Term Target : $ 50k~60k in 1 year (RSI 14 > 84, overbought)
Note
Price reinstating my oblique line, sub-6k $Note
Beautiful show of force of the Weekly MA 200 (area around ~ $ 5500).This is the most respected historical support by old-school traders.
Note
My Chart planned to come and find Weekly MA 200, it was my "Short Term Target" (sub-6k $) which is validated, the MA 200 being located at 5500 $.My Chart then predicts that the price will be carried by Weekly MA 200 with a post-Halving bullish rebound : this is my "Long Term Target".
Here is the MA 200 represented on my Chart and its role of historical support:
Note
Price reinstating my bullrun line > 10k $Symmetrical Triangle broken from above :
Note
Symmetrical Triangle broken by a Bullish Channel :Note
IN ADDITION TO THIS IDEA, I remind you of my other two long-term visions for Bitcoin (posted a year ago):
Note
My chart of 'August 4' completed with the price evolution of the last 4 months:Superb bullish break of the Symmetrical Triangle.
Note
Hi, who remembers ? 
Note
Ascending triangle (in white) validated:Possibility of a Pullback on the Triangle when the resistance of the Bullish Parallel Channel is reached (in red).
I represent you this possible Pullback in blue.
Note
The magic continues to operate on my posts for the past two years.The Bitcoin price which is almost perfectly close to my plot of August 04, 2020
(my arrowhead at ~ $ 30k for December 2020):
Note
WARNING!As strong as my analyzes ardently urged you to Buy & Hodl of BTC as of December 2018 at a value of $ 4k per BTC,
Also loudly my indicators (such as the overheated Weekly RSI14 > 90) are now saying to sell your BTC @ $ 55k (and DCR @ $ 160 for those who followed me).
My bearish target: BTC @ 40k $.
Note
Comfortably installed in stablecoins / short according to affinities:BTC - $ 10,800
First (fragile) support level reached.
Note
I reached the end of my target for this analysis (BTC @ 58k).I sold all of my Bitcoin.
Bitcoin is no longer changing fast enough:
Bitcoin is always infinitely forkable.
For example, Bitcoin gives Litecoin gives Luckycoin gives Dogecoin, on which some still speculate ... the good joke!
The implementation and adoption of Lightning Network on Bitcoin is too slow. It is still not a daily currency.
Bitcoin is far too centralized.
So I left the Bitcoin adventure to devote myself completely to the one called in 2016 "Bitcoin Suite", then finally : Decred.
Decred for Decentralized and Credits, name inspired by the well-known "Credits" currency in sci-fi literature.
Decred and its advances, which cannot be copied, because: Fork-resistant.
Decred who deployed Lightning Network (Layer 2) in the new version of its software, Decrediton.
May success be with you, always.
All The Best In Life!
Max
Trade closed: target reached
Hi,The bullish target of this analysis has been reached:
Buy & Hodl BTC @ $ 5,000 in early 2020.
TP (Take Profit) BTC @ $ 55,000 early 2021.
That was the plan. The contract is fulfilled.
So I gave myself 24 hours of reflection,
and I finally made the following decision:
"Hedge Plan" on my crypto wallet:
33% profit taking, validated by the objective fulfilled of this analysis
33% in Hodl on Bitcoin
33% in Hodl on Decred
With this reduced risk exposure,
I can allow myself a little speculation,
so now:
MY OLD ANALYSIS BECOMES MY NEW ANALYSIS:
TP2: BTC @ $ 100,000 (Stock-to-flow level)
TP3: BTC @ $ 300,000 (see analysis above)
Decred should easily continue to outperform Bitcoin.
Note that Bitcoin's MA 200 (5 Years) is now blooming with the $ 10,000!
This was already my conclusion of December 21, 2019 in this post:
farewell to the possibility of a BTC with only 4 digits even in the case of a bear market!
Note
Why did I start taking my profits? (up to 33% at $ 55k)My initial chart is very clear on this point:
Bitcoin is on a range (horizontal corridor) between its support at 44k $, which it has just retested, and its ATH at 58k $.
And in this range, my 2 major long-term publications clash:
Plan A: This publication, so far perfectly illustrating the SQRT growth function. It announced the trend reversal in Halving at a value of around $ 5k, then the ensuing bullrun, up to the ATH of $ 58k. Really perfect. Today it announces a range around this ATH, then a crash with a bear market until the end of 2022. Followed by a rebound for a next bullrun, with a BTC that will never fall below the $ 10,000 mark.
Plan B: my previous historical analysis dated 2018, Dec 28 (which I linked you twice above): it demonstrates perfectly that yes, "history repeats itself" ... in all case so far! Bounce back perfectly on the MA 200 Weekly for Buy & Hodl all bullrun since December 2018. 2014-2017 fractal reproduced perfectly from December 2018 to today.
Today, she announces the continuation of the bullrun up to an ATH of around $ 300k before mid-2021.
My (Plan B) is supported by S2F model (Stock-to-flow) which will soon reach $ 100k. Again, in "history repeats" mode.
In other words, 2 scenarios, an optimist (B), a pessimist (A).
And it is the breakout of the current range from the top (B) or from the bottom (A) that will allow us to see more clearly.
Likewise, the possible new long-term bear market (A) will only be fully validated if the price drops below the MA 200 Weekly. In the meantime, we are only talking about correction.
But do you want to wait for this happy or unhappy outcome?
Me not, hence my $ 55k profit taking when we hit the moon
and much less exposure to try the trip to Mars !!
I get a lot of private messages from misty minds,
I hope these clarifications on my point of view will help you
Max
Note
I regret what I said: "My (Plan B) is supported by S2F model (Stock-to-flow) which will soon reach $ 100k"I took the time to check: the original S2F had a target of $ 55k. Reached.
This is the "S2FX", a recent adaptation of the guru "PlanB" who speaks of a "soon to be reached at $ 100k". These last 48 hours, I have closely analyzed everything explained by its author, and I absolutely do not agree with his arguments. I will not expand on this subject. This is not the point. But for me, if you want to be Bullish again in the short-middle term, don't be thanks to the S2FX model!
Note
I finally resold all of my DCRs, luckily for me at the price I had just bought them.I keep some BTC for posterity (this has been a rule of thumb for me for many years: always keep some BTC no matter what).
But I am now very bearish for the rest of 2021.
I think that my chart of this publication has all its chances to continue to be realized with an entry in bear market in my "red zone" of All Time Higher (the red circle on my graph).
Note
On a daily basis, we have a bullish reversal validated by a breakout + pullback at the end of the Falling Wedge, potentially targeting a double top at 58k :
Note
The Falling Wedge fully plays its role as a bullish reversal pattern, already with a $ 55k retouched.But beware, this is a purely TECHNICAL rebound, as I have just demonstrated to you.
The ambient euphoria in the crypto market is already reaching new heights of absurdity that I had not seen since the CryptoKitties launched on Ethereum in ... November 2017. The following month, the speculative bubble on Bitcoin s 'collapsed very logically.
CryptoKitties were NFT (Non-fungible tokens).
The ridiculous madness of NFT is in full swing again.
And these "title deeds" have no other value than that which they embody... symbolically.
Worse, unlike a physical work of art that one can own at home and of which a replica will never be perfect, digital works are easily replicable and copies are inseparable from the original. The notion of property is therefore quite relative.
Crypto art doesn't really benefit artists, but speculators.
And who says speculation, says parabolic bubble and soon its collapse.
Trade closed: target reached
Note
Riding on the success of Bitcoin, altcoins are experiencing successive hypes : meme coins, exchange tokens (BNB..), ICO, decentralized finance, NFT... and now AIFortunately, in the face of the ridiculousness of this new AI hype, we can already make fun of it thanks to a very inspired new AI Meme Coin :
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.