Technical Analysis Update for Bitcoin

The Hurst cycle approach was developed by J.M. Hurst and is a powerful analytical and trading tool. The premise is that markets moves in cycles of varying nominal lengths and that all these cycles are interrelated. We are thus able to analyse price action on all frequencies, from short-term to long-term, and formulate an opinion on where price action is in relation to the overall trend/cycle structure. Furthermore, it is also a trading tool in that it identifies the appropriate trading structures in relation to the cycle phase. Cycles are measured from trough to trough rather than from peak to peak.   

Applying the Hurst cycle approach to BTC, the latest longer-term cycle (20-weeks) has a starting reference point of 6012.62, the 7-Feb low. This is where the last 20-week cycle (100 trading days) ended and the current 20-week phase began. Although BTC has in percentage terms encountered some big swings since the 7-Feb low, a clear bull trend has yet to develop in this current 20-week phase.

From a cycle perspective BTC is seen currently trading in the final stage of the first of two 80-day cycles (55 trading days). At this latter stage of the 80-day cycle, the cycle phase is down and highlights the fact that short-term pressure on prices is likely to be bearish. This leaves the 19-Mar low of 7321 exposed and attention will be on whether the 7-Feb low of 6012.62 can remain intact. This is a key chart point and key support.

It is anticipated that the 80-day cycle will likely complete within the next 2-3 weeks and the following observations will be important:

1.     Once complete, is support at 6012,62, the 7-Feb low intact?

2.     If the support remains intact, bulls can breathe a slight sigh of relief.

3.     If the support is breached however, this would expose Bitcoin to a deeper sell-off potentially.

4.     Watch resistance at 9176.44, the 22-Mar high. This is the first important resistance point.

To summarise, BTC is currently trading in the latter of stages of the first of two 80-day cycle phases of the current 20-week phase. A clear up-trend is not present and the focus for bulls will be on whether key support at 6012.62 remains intact. If it fails to hold, BTC will likely be exposed to bearish pressure over the coming weeks.


About the author: Taso Anastasiou is an experienced technical analyst who after all these years still finds the challenges of predicting market movements stimulating. Taso has been involved in the field of communicating financial market ideas for over 20 years having done this through a dedicated research house and the investment banking sector.