He noted that the Bitcoin price has retraced 50 percent in relation to its prior upward move, has found support at the three-year moving average, and has created a descending wedge. Let’s analyze these claims one by one and see what they mean for the future of the price.Make it or break it time.
— dave the wave (@davthewave) December 18, 2019
Right where I've wanted to see price for quite some time.
– 50% retracement of price
– Time of move up and correction near same
– 3 year MA support
– Deep in the buy zone
– plus formation of descending wedge pic.twitter.com/M3A7RrGkrM
Bitcoin’s Three-Year Moving Average
The Bitcoin price has just decreased to its three year moving average (MA). The same MA acted as resistance throughout the December 2018 bottom, before the price eventually broke out. Furthermore, the Bitcoin price is slightly above the long-term curved support line that outlines the logarithmic growth curve. This movement is very similar to that in December/January 2016. Back then, the Bitcoin price had just finished a long correction and made the first steps towards initiating an upward move. Also, it had just bounced on the three-year MA, which was slightly above the support line.50% Retracement
The Bitcoin price has retraced to the 0.5 log Fib level when measuring from the December 2018 bottom. The 0.618 level is below the support line, making this a very likely place for a reversal. Also, the previous upward move, measuring from September 2016, ended right at this level. Thus, if the Bitcoin price does the same this time around, we should see a reversal soon.Descending Wedge
Since the October 25 pump, the Bitcoin price has been trading inside a descending wedge. It is very close to the end of the wedge, having validated the support line several times. It is possible that the support line is slightly more downward sloping, since the presence of wicks makes it difficult to draw the correct slope. There is strong bullish divergence in both the RSI & MACD up to the daily time-frame, suggesting that a breakout will occur. This fits with the previous long-term analysis. To conclude, even though the Bitcoin price has been steadily decreasing for almost two months, the long-term charts suggest the price is very close to a bottom. A breakdown below $6000 would invalidate this prediction.Disclaimer
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