Bitcoin: Long term overview chart, defining historic moments
Just wanted to give a overview of the history of Bitcoin with this chart & some of the defining moments in its history. It is important to note that most market cycle tops or large sell offs on Bitcoin are associated with "Bad News", and usually before Bitcoin starts moving upwards with a strong trajectory it is preceded by a Halvening (When the amount of Bitcoins rewarded to Miners is halved) or other factors affecting its Demand (for example Paypal accepting Bitcoin showed a incoming retail demand for Crypto on the current run up and we also had a halvening in May 2020).
What is a Bitcoin Halving?
thehalvening.com
For every block a miner adds to the blockchain, they are rewarded with a certain amount of Bitcoin. There is a maximum of 21,000,000 Bitcoin that can be created. Satoshi Nakamoto wrote into Bitcoin’s code that the supply of new BTC awarded to miners is halved every 210,000 blocks, or roughly every 4 years. For this reason, Bitcoin halvings are important milestones in Bitcoin’s timeline and greatly affect the price over time. After the Bitcoin Halving in 2020 Bitcoin started to repeat its trend of increasing in value.
Decreasing Bitcoin supply increases scarcity, which historically leads to a increase in value. For more information on the Bitcoin Halving you can visit the above website it also has a useful countdown which gives us a estimation of the next halving in May 2024.
Will history repeat itself?
It is interesting to note that each significant retracement (downwards movement after touching the upper Resistance Channel) has a average move of 88%, so theoretically (this is pure speculation) if we were to reach the top of the channel in this current upwards movement, to go from there to the bottom of the channel once again is roughly a 89% retracement so it would "make sense" as far as price action goes for this to occur.
What are the potential target areas?
If we continue to trade inside this parabolic structure then we have a potential top at the $60,000-$80,000 region, technically we could top out anywhere around that area and still be inside the curved structure also.
Zooming in on this area, as well as looking at my other long term levels overview chart, in the next idea (click the below image to see some of my horizontal levels) we also have the 3.618 Fibonacci Extension for a price of $71400.
Using the Fibonacci Tool:
The Fibonacci tool is usually drawn from one key swing point to another - and gives us potential key levels to watch. It is quite common for the price to come up to the 0.618 Fibonacci and decrease in value, rejecting from there, with the latter being a bounce from the 0.382 Fibonacci level.
The Fibonacci tool is basically a mathematical equation that gives us important areas marked as lines on the chart, it is common for the price to reach these areas before reversing in the other direction, or piercing through them and confirming "Support" before continuing to the next Fibonacci level.
We drag the Fibonacci Retracement tool from different major swing high to swing low points, then double click on it to add our Extension levels.
-Price often has a thrust towards the 1.272 or other .272, .382, .618 extensions before a rejection occurs
The .618 Fibonacci ratio is referred to as the "Golden Ratio" there is a special relationship between the Golden Ratio and Fibonacci Numbers (0, 1, 1, 2, 3, 5, 8, 13, 21, ... etc, each number is the sum of the two numbers before it). So, just like we naturally get seven arms when we use 0.142857 (1/7), we tend to get Fibonacci Numbers when we use the Golden Ratio (.618, 1.618 etc) and traders are drawn towards these areas. We have marked the above extensions on the price chart so in the future we can see if we find potential trade opportunities off these important psychological areas.
What im watching out for
Using this current chart it would be a ideal situation to me for Bitcoin to hold above $30,000 in the coming month, then proceed to push past $50,000 if that occurs I think that we have a high chance of the price reaching the top of this curved structure.
The eventual market top will likely be associated with bearish news, also referred to as "Fud" ( Fear, Uncertainty & Doubt ). A likely market top on Bitcoins current run would be associated with Government regulations across all Cryptocurrencies, which could potentially take us to the bottom of the channel marked in the image - or to the red zone created at around $20,000 which would become a strong support area.
Overall as long as we hold above $20,000 USD i believe Bitcoin will continue to increase in value, with large institutions still buying newly created Bitcoin till this day faster then it is being created. The rules of Supply & Demand Tell us that when the Demand of the consumer outweights the Supply of an Asset it will continue to increase in value, and until this changes Bitcoin is looking like 2021 will be its defining year.
Thank you for reading the analysis!
What is a Bitcoin Halving?
thehalvening.com
For every block a miner adds to the blockchain, they are rewarded with a certain amount of Bitcoin. There is a maximum of 21,000,000 Bitcoin that can be created. Satoshi Nakamoto wrote into Bitcoin’s code that the supply of new BTC awarded to miners is halved every 210,000 blocks, or roughly every 4 years. For this reason, Bitcoin halvings are important milestones in Bitcoin’s timeline and greatly affect the price over time. After the Bitcoin Halving in 2020 Bitcoin started to repeat its trend of increasing in value.
Decreasing Bitcoin supply increases scarcity, which historically leads to a increase in value. For more information on the Bitcoin Halving you can visit the above website it also has a useful countdown which gives us a estimation of the next halving in May 2024.
Will history repeat itself?
It is interesting to note that each significant retracement (downwards movement after touching the upper Resistance Channel) has a average move of 88%, so theoretically (this is pure speculation) if we were to reach the top of the channel in this current upwards movement, to go from there to the bottom of the channel once again is roughly a 89% retracement so it would "make sense" as far as price action goes for this to occur.
What are the potential target areas?
If we continue to trade inside this parabolic structure then we have a potential top at the $60,000-$80,000 region, technically we could top out anywhere around that area and still be inside the curved structure also.
Zooming in on this area, as well as looking at my other long term levels overview chart, in the next idea (click the below image to see some of my horizontal levels) we also have the 3.618 Fibonacci Extension for a price of $71400.
Using the Fibonacci Tool:
The Fibonacci tool is usually drawn from one key swing point to another - and gives us potential key levels to watch. It is quite common for the price to come up to the 0.618 Fibonacci and decrease in value, rejecting from there, with the latter being a bounce from the 0.382 Fibonacci level.
The Fibonacci tool is basically a mathematical equation that gives us important areas marked as lines on the chart, it is common for the price to reach these areas before reversing in the other direction, or piercing through them and confirming "Support" before continuing to the next Fibonacci level.
We drag the Fibonacci Retracement tool from different major swing high to swing low points, then double click on it to add our Extension levels.
-Price often has a thrust towards the 1.272 or other .272, .382, .618 extensions before a rejection occurs
The .618 Fibonacci ratio is referred to as the "Golden Ratio" there is a special relationship between the Golden Ratio and Fibonacci Numbers (0, 1, 1, 2, 3, 5, 8, 13, 21, ... etc, each number is the sum of the two numbers before it). So, just like we naturally get seven arms when we use 0.142857 (1/7), we tend to get Fibonacci Numbers when we use the Golden Ratio (.618, 1.618 etc) and traders are drawn towards these areas. We have marked the above extensions on the price chart so in the future we can see if we find potential trade opportunities off these important psychological areas.
What im watching out for
Using this current chart it would be a ideal situation to me for Bitcoin to hold above $30,000 in the coming month, then proceed to push past $50,000 if that occurs I think that we have a high chance of the price reaching the top of this curved structure.
The eventual market top will likely be associated with bearish news, also referred to as "Fud" ( Fear, Uncertainty & Doubt ). A likely market top on Bitcoins current run would be associated with Government regulations across all Cryptocurrencies, which could potentially take us to the bottom of the channel marked in the image - or to the red zone created at around $20,000 which would become a strong support area.
Overall as long as we hold above $20,000 USD i believe Bitcoin will continue to increase in value, with large institutions still buying newly created Bitcoin till this day faster then it is being created. The rules of Supply & Demand Tell us that when the Demand of the consumer outweights the Supply of an Asset it will continue to increase in value, and until this changes Bitcoin is looking like 2021 will be its defining year.
Thank you for reading the analysis!
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