Possible End-Game for this Multi-Year Cycle in BTC and Alts
Dear Reader,
Technically, in the shorter term, price is looking toppy here as it continues to oscillate in an extended range around 100K. For investors who bought at lower levels this should be no cause of alarm at all, for this would be just continued normal volatility within a technical range. Indeed, a technical chart looking at possible levels of consolidate should serve to assuage any alarm that might set in on a decline.
For those yet to buy, coming to the market recently and hoping for a more opportune entry, the technical chart is going to be of much interest, where on the one hand they are looking to avoid buying a peak price, and on the other are looking to establish a position.
So first to a chart in that medium-term time-frame that provides enough price action and context to enable some technical analysis, which can at least provide some rationale to buying and selling beyond the momentary sentiment of the market.
The first noticeable metric is the rapid 2x move over a few months, and where that move has currently stalled. Price has since then been contained in that top range of the fib for a couple of months now with momentum to the upside starting to look lost with the weekly MACD on the cusp of crossing.
Though price can always explode to the upside at any time, technically, there is a good chance of a further move to the 0.38 fib level. Accordingly, the trader/ investor could treat this as a stress-test of sorts - if such a move developed, would I be OK with it?
Does this mean the top could be in? Not at all. Rather, it looks to be yet another technical correction of a technical move up. Further, there is nothing too extreme in this price prediction, and certainly nothing to flip one from ‘bull’ to ‘bear’. I’d consider it more technical consolidation as opposed to a severe correction.
This reading, or perspective on possible price development, becomes weightier on further zooming out a little more on the chart, where that greater multi-year trend up becomes apparent.
The Technical Multi-Year Channel
What I’ve often referred to previously is the remarkable technical nature of this multi-year move so far. In the above chart, you see in the aggregate a relatively stable upward price action over the years.
You’ve also plenty of trendlines in support coming through on multiple time-frames, the weekly, monthly and yearly.
And yet price is now oscillating at the top range of the multi-year channel - where the previous massive move up in early 2024 consolidated right through the channel, I wouldn’t be surprised to see this consolidation of a shorter duration… given that the recent move up was also shorter.
The weekly MACD is significant here, where each move up is followed by consolidation back to the zero-line denoting stability and the absence of an over-extended market. I’m thinking a third such consolidation may well be likely, which would then most likely set up for a subsequent higher move over the course of the second half of the year. From the technical perspective, this would be ideal.
A Closer Look at the Multi-Year Channel with the Technicals
Given the relative technical and stable nature of this price development [previously, price has gone parabolic on making new highs], I think a good case is to be made out for another range-bound movement over the course of the next few months. This would in turn set up nicely for the next and perhaps final move up in the second half of the year bringing the multi-year cycle to completion.
This extended range, if it’s to develop, should be contained mostly within the highest fib level [0.23] with perhaps the odd wick down into the 0.38 fib level. Such a 10 - 20% odd range [in nominal/ price terms] will of course have an impact on the alt coins. And so to finish with, a comparison on how such a range in BTC may play out with the alts.
Possible Impact of a Repeated BTC Range on the Alts
For an example alt coin, I’ve chosen Harmony [ONE]. Whereas a case can be made out for ‘investing’ in a more major alt coin such as ETH for the longer-term multi-year trade [or investment proper], coins such as this are better targeted for shorter-term trades on the volatility. So for example, the previous 5x move provided an opportunity to take some profit on a trade, where BTC only moved 2x in comparison [and hence better to sit on for the long-term investment].
If a multi-month range once again sets in with Bitcoin, there is a good chance that alt coins such as ONE will once again re-test their lows. This in turn would provide opportunity once again for a relatively short-term trade with which to take profit in, which in turn allows one to continue sitting on BTC as a longer-term investment.
Whereas there is the possibility of a 7x return in ONE [in a technical market morphing into a manic one], BTC is likely only to do another 2x from the bottom of its current range as per the followng chart.
Please keep in mind that this should not be taken as financial advice, or as a sure bet. Rather, it should be understood as speculation about the future, where if one is to speculate, one should also manage risk accordingly. The ways in which risk can be managed is something I have laid out in previous articles for subscribers to consider.
Until next time,
Stay [relatively] safe out there,
Dave the Wave.