Bitcoin longterm trend discussion and current pricepoint

Hello y'all!

Just after making my introduction post I wanted to try out to write my first real post and maybe try to get some discussion going or just letting you know how I feel about the bitcoin trend at the moment. Actually I'm still relatively new to crypto (since the end of June) so I'm not trying to be too serious are not necessarily trying to spread FUD or anything. Just want to have an open mind about all possibilities :). So what I wanted to do is give my outlook on the Bitcoin chart since the massive bullrun starting from about august 2015 (~$200 BTC) and continuing to hold steady. In other words, I've done some technical analysis and found some interesting things I'd like to share.

I'm going to discuss to price BTC/EUR since I live in Belgium and trade EUR for BTC and reverse but the trend of the BTC/USD chart is telling exactly the same. So let's take a look at the weekly BTC chart starting from 2015 until now.

As you can see this chart is actually the logaritmic of BTC/EUR. This actually makes it easier to analyse how significant the rise or drops in prices are in comparison with rises and drops in the past. So the first thing that I did is check how the trend formed over time. Each time there was a higher high and a higher low, which makes for an uptrend. In excel I've put in all the lows and highs making these higher lows/highs. Then I checked for the relative increase or drops in prices for low to high and from that high to the next low and so on. It looks like this:

We see that to go from a low to the next high we got at least and 54% increase and a maximum increase of 223%, which was the biggest bullrun in the trend. On average the moves up are 133% price increases and along the way there are some red candlesticks but these are very small (often times <10% drops, max 13% drop).

When we go from a high to the next low we got obviously much lower percentages of price change. 21% was the smallest drop and 42% (not really coincidently after the big 223% increase) the biggest drop. On average when forming the next low (or in other words getting a correction) BTC loses about 34% in value, which is negligible compared to the average 133% increases. This makes for a solid uptrend when viewing the whole picture.

Apart from analysing how the patterns within the trend are, I also looked at how long they took to form. Logically the uptrends (within the big uptrend) takes on average much longer then the downmoves take. The next move to the upside takes on average +- 80 days or almost 3 months of riding the wave of happiness. The waves of frustration or fear when the price goes through a correction only take about 23 days or 3 weeks and two times it only took 1 week.

Now, tying all this information together and looking at the price point of BTC at this time... Since coming back from the low reached in the beginning in July, the price has risen with +- 170% and it did it over 48 days. The average price increase before the next correction is on average +- 130%, doing this over a longer period of time (+-80 days). This leads me to get a bit worried that we are due for another correction, although the previous bullrun was an ever bigger increase as I said.

Before discussing what I think the odds of either getting one more leg up or a correction, let's look at the trend. The trend moved for a long time between the blue lines, actually for about 2 years. At the end of April the trend went almost parabolically compared to the previous one, forming a new steeper trend since then. This trend is moving between the purple lines. I guess the new trend is possible but harder to continue over the years.

Now taking all these factors into account I'm actually a bit worried that the price level is overextended at the time and we're in for some less fun weeks. Arguments are the following:

• The price increase since the previous low has been 170%, which is a bigger increase then we get on average when reaching a new peak.
• The price could indeed increase with the same % as the previous time because we are in a new trend now, but this would mean that the price would need to extent even above the purple line zone.
• It only took 48 days to get this big price increase, and a rising price in a short amount of time leads to more selling power and profit taking.
• It would be perfectly healthy for the price to drop to the lowest purple line, since we again touched to highest purple line since doing this in June.

Besides this I took a look at the RSI and to 21 week Moving AVG.

2 more arguments:

• Moving average (yellow line): It is this moving average the BTC trend has been holding the whole time. Every time the chart is bouncing of this moving average which makes it a very strong indicator. What is noticable is that everytime the trend is accelerating to the upside and deviating away from the MA, we get a pullback just so that we touch the moving average briefly. This time we are again pretty far above the MA after a big move up. Looking and learning from the past, we'll need to touch it again, it's the time for it.
• Weekly RSI. The use of the weekly RSI has been pretty accurate over the past couple of years. Everytime the RSI went to 80 or above we were in for a correction. The corrections always went so far so that the RSI went back to +-60. When the RSI started falling from these levels around 80 they always made their move to below 70 and down to 60 without reversing. Now the RSI has begun to make its downmove once again and we can expect it could go to +-60 before the pullback is done.

This could then all coincide with the BTC price falling to the lowest purple line which could be about €2500 or just above $3000. And this would just be a healthy correction and still perfectly within the strong uptrend leading us the a massive price in some years. The red candle which has now been forming is about a 13% dip. It's only been once we saw a dip of this magnitude followed by further upward movement.

This leads me to believe we could see a correction. I'm really interested what you guys think of this view. It's not that I would like this by any means, just trying to be open to everything and be prepared.

Milan