Bitcoin and other cryptocurrencies remain in the news each day. A dramatic pullback occurs over a 3-month period; note the 3 black crows candlestick pattern although this formation usually displays longer bodies. This month, February 2022, bitcoin pops and is staging a recovery rally. A monthly chart is for long-term forecasting think months and a year or two.
Bitcoin was red hot back in 2017 with exponential growth. Bitcoin steadied into 2020 forming the bullish ascending triangle pattern (green) so a breakout was on tap and voila, price goes parabolic again. During 2021, as the enthusiasm for bitcoin rages on, the double-top forms.
Bitcoin peaks at 68,411.70 during November so bitcoin backers were bragging at the Thanksgiving Day table that they were the sharpest tools in the shed. In January, their dull minds were exposed as bitcoin tanks to 34,153.63 a -50% crash. Humorously, if bitcoin was given as a holiday gift in December, it is looked at as a disappointment in February.
Bitcoin is at 44.3K in the chart and in real-time the quote is 43.7K. The Federal Reserve releases meeting minutes this afternoon that will provide their thinking on inflation that will move markets.
The red lines show the negative divergence spankdown easily forecasted. As price came up for the all-time high, the indicators are sloping down, neggie d, price is diverging away from the chart indicators, except for the MACD (green line). This tells you a smack down is on tap but the higher high in the MACD means there is fuel in the tank for bitcoin to come up once more to tease the record high on the monthly basis.
Both of the Aroon lines remain in the bullish euphoria phase with nowhere to go but down. Bitcoin would be cooked right now on a long-term basis (months and perhaps the next year or two) if the MACD was neggie d but it is not. The LT top is not in until the MACD sets up with neggie d and that requires price to come back up on the monthly basis.
Note how bitcoin is getting squeezed-in by the moving averages and will either decide to break out higher at 45.1K to 47.2K, which it is testing now, or, fall through 37.3K which would put far lower numbers in play.
Canada's Deputy Prime Minister Chrystia Freeland, a henchwoman of King Trudeau's dictatorship, proclaims that the state now has power to seize personal and business bank accounts and cancel insurances and licenses. Well, isn't that a fine how do you do? She is getting scratched off the Christmas card list. It gets better.
Freeland, what an odd name considering what she is doing, proclaims that cybercurrencies will be controlled to prevent funding for the Freedom Convoy in Ottawa, Canada. How does she plan on controlling the cybercurrency industry? The protesters are demonstrating against King Trudeau's tyrannical rule and draconian pandemic mandates. People want their freedom back.
It may have been a major miscalculation on Canada's part but they have just made the single best commercial for bitcoin and digital currencies ever. Many people are bitcoin proponents because the store of money is not controlled by governments or central bankers. Canada casts this concept in concrete telling citizens that your bank account and money can be frozen by the government at any time. That was not a wise decision by the Canucks. It will chase people into digital currencies. The comments destroy trust in financial institutions. Not good. If the cybercurrency proponents were smart, they would exploit Freeland's disastrous edicts.
Getting back to the long-term chart above, the expectation would be for price to come up again into the 58K to 68K range, and the indicators will likely then be all set up with neggie d including the MACD, you can check the chart when it occurs, and that will be a LT top for bitcoin perhaps occurring in the April-June time frame.
The central bankers are going to jump on the digital currency bandwagon. There will likely be a Fed coin on tap and Canuck coin. Of course the central banks will then outlaw or heavily regulate the other digital currencies and only offer their own. Perhaps this will be the reason that bitcoin places the LT top in the months ahead.
Keystone does not own bitcoin and is not playing any derivatives right now, but if bitcoin price comes back up into the 58K+ range, perhaps as enthusiasm increases due to Canada's boneheaded comments, a look at short bets against bitcoin will be in order. If/when bitcoin price rallies, watch the MACD on the monthly chart since it will tell you when the game is over. When price comes up to say, 58K+, or at least in the vicinity of those prior two tops, and the chart indicators are below the maroon lines in the right margin, neggie d, it's over on the LT monthly basis. 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.
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