top of page

Bitcoin Update for May 6th, 2021

First off before I get into the update I want to say that no one really knows how long this bull market cycle will last. We can all make educated guesses based either on mountains of market data, past history, or a combination of both. I tend to attempt to do the latter, the market data gives you a view of the current market conditions, and studying past price action can help you spot trends and cycles.

Bitcoin does not have a long history but looking back it does appear to run in 4-year cycles (approximate), that does not mean it will continue but we can try to use that as a guide. Interestingly, the prior two bull market cycles both peaked right near the beginning of December. That being the case I wouldn't necessarily say that this cycle then must peak in December but I do believe it will be later in the year, maybe late summer or fall.

Bitcoin Long Term Chart

On the chart above I have marked the price bottoms after a price peak, I have marked the halvings, and I have also marked the cycle price peaks. Looking at the first cycle we can see that the number of days from the bottom to the halving, and from the halving to the peak are pretty close (371 & 364). For the second cycle, we have 546 and 518, so we can see that the halving seems to occur about halfway between the bottom and the peak.

So, now looking at the current cycle we can see that it was 511 days from the bottom to the halving, so knowing this we can try to make an educated guess at where this cycle might peak. If we move forward approximately 511 days that put us into the fall. Keep in mind these numbers are approximations, if we came within a week or so or even a month of the actual peak that would be pretty damn good. Also, keep in mind that I could be full of crap and be way off. There is always the possibility of a black swan event also coming into play and affecting the outcome. I just want to add that in my opinion, this bull market has already been pretty crazy, if it lasts through the summer and into the fall I can't even imagine how insane that will be.

Okay, moving on to where bitcoin stands currently we will first look at the 4-hour chart. I want to also say that for anyone who is holding long term I would stick to the longer time frames, day, week, month, or even just the weekly and monthly. Many times looking at too small of a time frame will only spook you when bitcoin makes sudden violent moves, where if you zoom out those same moves appear insignificant. Myself, I just look at the 4-hour chart to try and get an idea of where bitcoin may be heading in the short term. I give much more weight to the longer time frames (weekly, monthly). Sorry, I keep getting sidetracked, looking at the 4-hour chart below we can see that bitcoin is currently up against a resistance level. It approached it yesterday and was rejected and is now making another attempt to break through it. Bitcoin has actually been struggling with this same resistance level for about the last week. I still believe bitcoin is in a consolidation phase and as such don't feel that bitcoin is going to surge to a new all-time high any time soon. My opinion is that bitcoin will remain range-bound wondering between $50k and $60k for the foreseeable future.

Bitcoin 4-hour Chart

Bitcoin Daily Chart

Zooming out to the daily chart we can also see the resistance level that bitcoin is now struggling to push through. We can also see that even if bitcoin breaks through this one there is another resistance level right above that bitcoin will have to deal with. The next resistance level will most likely prove to be at least as tough as the current one based on the number of times that bitcoin was rejected from it in the past (yellow arrows). Looking at all of this tends to strengthen my belief that we will see more sideways price action from bitcoin at least in the short term (days to weeks).

Bitcoin Weekly Chart

Bitcoin Monthly Chart

Zooming out even further, looking at the weekly and monthly charts, in my opinion, they both look very bullish. We can clearly see the consolidation on the weekly chart, and all of the moving averages are very much in an upward trend. The weekly indicators (RSI and MACD) in my opinion don't look quite as bullish but I believe that is simply because of how strong the move up was from October through the beginning of the year. I don't feel that it is too unusual that there has been a loss of momentum over the last few months. After such a crazy move I believe it is reasonable and healthy for bitcoin to cool off for a while.

Looking at the monthly chart there really isn't much I can say other than it looks even more bullish in my opinion than the weekly chart. All moving averages are almost verticle and both indicators are very bullish looking. The only thing I would say is that the price has become a little extended above the 7 EMA but because I believe bitcoin is in a consolidation phase over time that should rectify itself.

So to sum it all up my opinion is that we will see more sideways price action from bitcoin with the altcoins taking turns surging upwards. This is what we have been seeing over the last few weeks and I believe that will continue for a while longer. At some point, bitcoin will once again take the lead and dominate the market.

I want to also say that I feel incredibly blessed to be involved in the crypto space.



16 views0 comments


bottom of page