Bitcoin Analysis - Jan 24

I tend not to do any trading when I am away on vacation as my past history shows trading on vacation does not work well and is not good for my vacation mindset.   Before leaving for vacation I put myself if positions that are safe and do not need to be monitored closely, in this case I was mainly in Bitcoin, Ethereum, and multiple DEX investments.

The good news is that my portfolio did go up while I was away, Bitcoin was down, Ethereum was up and the DEX cryptocurrencies did great.

Today I am performing analysis on Bitcoin, tomorrow I will write about Ethereum followed by DEX investments

Bitcoin is currently Bearish

Looking at the current technicals Bitcoin is definitely bearish as the Trend Mean score is 29% (bearish);  It is trading below its baseline (bearish); 3 out of 5 MACD indicators are bearish (neutral), Trading inside the Bollinger Bands (neutral);  5 RSI levels are all below 50% however they are all above 30% (neutral).

Lets look at the Bitcoin Chart

The philosophy I follow is to be on the correct side of significant price moves.   These indicators have been very bullish since early September when Bitcoin was trading at just above $10,000.  In 2021 the Bitcoin price has gyrated significantly hitting highs of $42,000 followed by two trading spikes below $30,000 twice.   The current price path appears ready to test the $30,000 level again.   Significant is the fact that both support tests have led to price recoveries and the Bitcoin price spent little time below the 30K level.

On Jan 20th, the indicators showed cleared Bearish signals as the trend score dipped below 30% and the Bitcoin price was below its baseline.   At that time RSI signals were below 30% (bearish with crypto as a potential dump is possible) and multiple MACD signals were negative (Bearish).   So, I should have been selling, but I was on vacation and did nothing.   So, this leads to what am I doing now.

Currently I am holding and not selling as I feel I have missed my selling point (The red arrow from Jan 20th).   The overall cryptocurrency market is performing well.  If the overall crypto market was weak and going down this would be very negative.   Current Bitcoin sales are flowing into the altcoins, specifically Ethereum has been strong and many DEX cryptocurrencies and the cryptos that support DEX trading are outperforming.   

If I had sold at the 36,000 level, I would not be buying this dip yet.   I would be waiting to see price stability, specifically seeing a trend mean score above 70% while the Bitcoin price is trading above the baseline.  

A deeper look at the chart

Looking at the Bitcoin chart above a little closer,  I marked three red arrows and four green arrows as times when the Trend 1-hour and Baseline indicated a bearish (red) and bullish signals (green)

As I have shown in prior articles, the 1 hour price chart is critically important for Bitcoin technical analysis.  For the first bearish signal on Jan 11th the Bitcoin price is $37,000,  Bitcoin has been trading below the baseline price (Black line on chart) for over 20 hours, the trend first hits 30% (the trend lines are below the price chart) at this time.   Bitcoin would continue to dip to lows below 30K, this is a time the indicators were accurate for a $7,000 price move.

The first green arrow occurs on Jan 12, Bitcoin price has recovered from its recent lows and is trading at $36,000 which is above the baseline for four hours and the trend score is at 68%.   However this is a case when the indicators are incorrect and the momentum will fade and the price will retreat to a price of $32,200.   A miss of $3,800.

The second green arrow occurs on Jan 13,  Bitcoin price has recovered from is recent low of $32,200 and recovered to a price of $35,000.   The price is again above the base line and the trend score is over 70%.   The price will continue to go up to $40,000.   An accurate prediciton of $5,000 price move.

The Bitcoin price fluxuated alot between the 2nd and 3rd green arrows, hitting a high of $40K and lows of $34,200.  While going to a price of $34.2 K Bitcoin is trading below its baseline but never reaches a trend score below 30% so it never produces a bearish signal.  The Bitcoin price will return to a price of $38K and start falling until reachins a bearish signal at $34.4 K level.   The third green arrow is a miss of $2,000 downward move.

The second red arrow occurs on Jan 17th with the Bitcoin price at $35,800 as the Bitcoin price has been trading below is baseline and the trend score is below 30%.  While the price goes down to $33,800 the price quickly recovers and hits a price of $36,600.   I am call this a push, as the price did fall $2,000 after the bearish indicators, however to recover to a price $1,000 above the 2nd red signal.

The fourth green arros occurs on Jan 18th with the Bitcoin price at $37,000.    It would prove to be inaccurate as the price will decline to lows of $34,000.   A miss of $3,000.

The most recent signal was the bearish one on Jan 19th with Bitcoin at a price of $34,000.   This trend continues to be bearish as discussed in the earlier parts of this article.   An accurate predication as lows of $28,600 occur; a $5,400 price move.   

Overall since Jan 11th the signals have been correct 3 times, inacurrate 3 times and a push the 7th time.   However the 3 times is was correct led to larger price moves ($7K, $5K and $5.4K) to the 3 times is was incorrect (-$3.8K, -$2K and -$3K).   This does not include the postive position is was in since the beginning of the year. 

The platform Quantify Crypto provides live cryptocurrency prices, technical analysis, news, heatmaps and more. Our flagship product is the trend algorithm, designed to be on the correct side of significant cryptocurrency price moves.

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None of this is meant to be financial advice and I do not have any financial expertise. Although I worked at the New York Stock Exchange for over 23 years, it was as a developer supporting computer systems, not as a stock trader.

Full discloser: I do own Bitcoin, Ethereum and have other cyrptocurrency positions.