It is impossible not to have read the latest news today considering that Bitcoin is on the rise and people are increasingly curious to know what will happen in the next few hours.
Looking at the analysis of Bitcoin’s annual cycle it is possible to notice a subdivision into two semi-annual sub-cycles presumed to be, for ease of understanding, of equal duration and identified by the two yellow quadrants plotted.
The first six-monthly bullish structure projects Bitcoin into a new upward phase of a cycle, in a two-year first phase. The overall annual structure, aggregated with last year’s frame, would constitute an overall four-year structure, indicatively started at the lows of January 2019 and expected to close at the beginning of 2023, where the year 2020 and the whole of 2021 would be the phase of bullish push.
The cyclical analysis, in this case, also shows great initial strength of this second six-monthly cycle that started at the beginning of September, which should find its natural conclusion in a relative minimum indicatively projected in March 2021.
Since the structure still lacks the expected final phase, the coming months may no longer be as strongly bullish as those that have just passed and indeed a phase of weakness is expected from the beginning of the new year.
The graph also shows a monthly cycle in the closing phase around November 14th, indicating that the cyclical analysis is not only used to draw a wide spectrum view of the markets but above all, it is used to identify the lower sub-cycles (quarterly, monthly, weekly, daily and so on) that allow having a granular scanning of the macrostructures.
The danger situation is well indicated in this long-term weekly chart that shows a great closeness to algorithmic levels and price targets (red horizontal lines), converging also with Gann levels (in purple) that in the past have been scrupulously used as resistances or dynamic supports as trendlines.
This macro vision, shown by means of the cyclical inverse, is also assisted by the observation of the RSI indicator, returned after almost two years in overbought territory, which highlights an incoming topping phase.
The levels to be monitored are therefore: upwards at $16,100 and $19,000 as resistance, while downwards at $13,350 and the $12,500-11,200 area as support.
Overview of the Altcoin market
The chart of the total market cap of Alternative Coins shows a phase of recovery from the bear market that had characterized the last 2 years of the market.
In this chart it is evident that the greatest weight among the “Alts” is attributed to Ethereum, the queen of crypto and, subsequently, to the other 8 of the top 10 in terms of capitalization.
When forming the cycles, the market is in a new bullish phase that will have to aim to break the psychological threshold of 200 B before a corrective phase that will probably lead to a relative low in the first quarter of 2020.
Overall, the market is healthy and the DeFi bubble that characterized this year has not particularly affected capitalization. The situation then looms slowly as an accumulation for the coming months, in view of the big changes expected for next year (Ethereum 2.0, NFTs, gaming).
In this perspective, a downturn in the coming weeks could be an excellent opportunity for the accumulation of high potential tokens that have built up sustainable ecosystems such as ETH, ADA, LINK, FTT, BNB to name a few.
Eugenio Maria Buti. Also known as Ray_Burst, Eugenio has been an independent analyst and trader for more than 6 years. After an independent training in the world of investments and technical analysis applied to financial markets, he undertook the study of cyclical analysis to add the “time factor” to traditional technical analysis, based instead on patterns, indicators and candles. Monitoring prices through the traditional analytical system, together with the cyclical time analysis, constitute the skills acquired and developed at the basis of his personal profitability in the crypto-currency environment, where the latter aims to provide the necessary tools to predict, or rather, to expect market movements fairly in advance.