NYXBT Bitcoin Weekly Chart

The crash in bitcoin is epic. At the end of 2017 and start of 2018, the wine was flowing like water. Bitcoin was approaching 20K with analysts guaranteeing 30K, 40K and higher. Of course the excessive optimism, joy and euphoria leads to a punch in the face. A drop from 20K to 3K is a -85% crash. Last spring, bitcoin holds the 50-week MA support so the bulls thought the worst was over. Nope. Bitcoin comes down again last May to look at the 50 and collapses through. Price comes up for the back kiss of the 50 in July for the bounce or die decision, and the bitcoin bears win with price choosing to fail.

Bitcoin moves through the ominious red descending triangle so you were waiting for the next shoe to drop if bitcoin chooses to lose the 6000-6200 level. It does. The tight standard deviation bands (pink arrows) predicted a huge move but cannot predict direction. The bands squeeze price lower in November as the US stock market crashed.

The low prints inside the triangle back in February and April did not provide real touches to the base line so you would have to say the vertical side is more in the summer time frame at about 3000 points in height. Thus, the rupture of 6K should lead to 3K; and it does or is at least in the neighborhood so the descending triangle is satisfied generally.

The chart indicators are positively-sloped but not positively-diverged. Bitcoin price needs to make a lower low on the weekly basis then, if the indicators remain sloping higher, they will be in positive divergence forecasting a strong multi-week recovery. The green circle area is generally a buy. Bitcoin is currently trading down -3% to 3.4K.

Bitcoin is filling that juicy gap from July 2017. The expectation is for bitcoin to print 3.2K to 3.4K over coming days and this is a buy. Bitcoin will rally a few weeks targeting the middle band, also the 20-week MA, now at 5036 and falling. In a month or two, say February-March, do not be surprised if bitcoin is above 5K.

It is all not wine and roses for bitcoin, however. On the monthly chart, the MACD line is weak and bleak wanting another low on the monthly basis. Thus, bitcoin will not print a multi-month and perhaps multi-year bottom until the March-June time frame of this year. From mid-year forward, into 2020, bitcoin should move sideways to sideways higher and likely be at 6000 at the end of this year or early 2020.

Thus, taking the above analysis and sprinkling on some of Keystone's magical voodoo powder, bitcoin will likely bottom over the coming days at 3200-3400, then a big multi-week rally above 5000 say in February-March. Then down again, perhaps as the US stock market crashes again, after March, dropping down to 2800-3200 which will be a more firm bottom mid-year. Then bitcoin should travel sideways to sideways higher into the end of the year and early 2020 back up to 6000-plus.

Keystone does not hold any positions in the bitcoin arena. KODK was played for a quick trade this year. GBTC, RIOT, BLOK, KODK and OSTK are potential long plays. BLOK has rallied for the last month and the weekly chart indicators are long and strong wanting more highs on the weekly basis ahead. Thus, in this highly dangerous and speculative arena, BLOK is a safer bet buying it on weakness going forward. Keystone will likely buy GBTC but wants to get an entry price at 3.6-3.9; perhaps that will appear today or this week. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.