BTC update

This post is based on my last BTC post of 24 Jan

In that post I discarded my previous converging triangle and proposed that BTC was forming a bull flag.

Looking at the recent developments of the last week, I have a modification to that theory:

BTC once again appears to be forming a converging triangle. It has not yet broken out of the channel I described in my previous post and is thus still forming the bull flag. Shown below is the chart I used in my previous post:

From https://mentormarket.io/bitbrain/btc-24-jan-a-change-of-direction/

BTC remains range bound, so the bull flag remains in play for now. My previous prediction was an upwards break out of the channel - which still stands.

However, the flag is becoming rather long and other patterns are forming. While I still believe it to be the most probable scenario, I'll reduce the certainty of my bull flag from 70% to 65%.

In addition to the flag, a new converging triangle has developed:

Whether you measure it at the extremes or at more established price levels, the different variations of the triangle tell us the same story: that a breakout if likely before the end of the month.

I allocate a certainty of 60% to this scenario.

If both the bull flag and the triangle are correct then this gives us more certainty than we have enjoyed for some time. Unfortunately probabilities don't stack when you combine then, quite the opposite:

Using 65% for the bull flag and 60% for the triangle, we arrive at a probability of only 39% for the combined scenario.

39% is not bad in a volatile market, but it's also not the kind of thing that you bet your house on. Fortunately one doesn't have to. As I said last time, the news to trade on would be a break out of the top of the BTC channel, at which time I would go long on BTC due to the continuation nature of a bull flag.

For now my crypto portfolio remains very stagnant since the start of 2019. I interpret this as a positive sign: it isn't going down like it did for all of 2018. I'm hoping that this is the turning phase which I think it is. I still owe you a long-term BTC update which will help you to see why I think that - don't worry, I haven't forgotten about it!

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

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