BTC Contingencies

Dear Readers,

How did people check their weight before any form of weighing scale was  invented? - Quora

I was planning to write one of those more macro big picture articles this week, which involved sketching future peak prices and looking at a layering out strategy in order to take some profits, and yet with recent price action in BTC I think subscribers are more interested in whether we do continue to see higher prices in the more immediate term or not. And so to a look at the chart and contingencies this week, where the sketching of peak prices can wait for another article.

The primary concern of recent price development is a possible break of the recent parabolic rise. I say possible for even though price is not necessitated to observe a technical line - that it could easily break it, reverse and continue upward - the technician of price has to consider the ‘weight’ given to the trend as shifting. The possibility of the recent trend not eventuating increases. Accordingly, it makes much sense to consider contingencies. And so to the chart.

Here we see the parabolic trend line clearly broken. This functions as a line in the sand so to speak, where once broken the possibility of a solid correction needs be further entertained. Also of consideration here is that this kind of correction can well occur while the greater upward trend remains intact… albeit less parabolic. That an immediate parabolic spike loses momentum and corrects may entail even better eventual parabolic prices at a later not too far removed date.

Zooming out a little on the chart, it is now conceptualized to allow for the contingency of further consolidation along solid technical lines. The fib retracements are seen as a series of real corrections [relative to their moves up] while showing an over-arching continuing trend that remains bullish [while no longer parabolic]. On the greater timeline also, the LGC ‘buy-zone’, or the lower shaded band of the LGC channel continues to provide support.

Also of interest in the above chart is the weekly MACD failed to cross bearishly on the previous consolidation, and from there price renewed its bullish run. If it were to cross this time round, I’d then give more weight to a continued consolidation in the short term, where the conventional idea of a more regular ‘4 year cycle’ would increasingly come into play.

And so zooming out even further, to a greater time-line, where the consolidation turns more into a macro correction even while that macro along the lines of the LGC channel remains bullish [a correction within an ongoing secular bull market]. Though slightly alarming it is something to consider as a contingency in one’s ‘war plans’ so to speak [and is something I’ve considered for quite some time in previous posts]. On the positive side, a postponement in the eventual parabolic spike gives the potential of a higher target. Note that there would be something of a parallel in this development to that of 2019 through to 2021.

So the reader will naturally ask, ‘Dave, all these contingencies are fine and dandy, but to which do you give your credence?’ And a fair enough question it is also. Personally, I currently give more weight to the earlier 0.38 real correction charted above than the larger macro correction as just sketched.

In sum, I’d say that those that bought in the LGC buy-zone and continue to hold are still in a solid position with their investment. It’s the volatility of the market that proves tough for most buyers. They are first drawn in on the higher prices that come quickly, that front-run the expected trend, and then get caught out as those higher prices correct. It’s as if the market is designed to frustrate the many… and for all practical purposes, you may as well believe that it is. It requires some courage to buy low, some tenacity to hold while price is volatile, and some hedging of one’s mindset in order not to be too dogmatic about it all… and accordingly not to be too exposed.

Until next time,

Stay, relatively, safe out there,

Dave the Wave.