Welcome to the first episode of NewsBTC’s all-new daily technical analysis videos. We are going to be looking at Bitcoin price actionUse the weekly BTCUSD chart.
Specifically, this episode looks at Bitcoin’s “most profitable buy signal” in its entire history: the hash ribbons. To find out if there’s a bottom, we also use the logarithmic MCD to analyze weekly momentum. Check out the video.
VIDEO: Bitcoin Price Analysis (BTCUSD): August 22, 2022
Everything About the Hash Ribbons
Charles Edwards was the creator of the Hash Ribbons. They’re a pair of moving averages, based on Bitcoin hash rate (and mining difficulty), that signal when miners have capitulated. The buy signal will be issued when the phase is over. In fact, its buy signal has been called Bitcoin’s most profitable buy signal producing several thousand percent ROI on average each time it triggers. It is more lucrative if it occurs before a Bitcoin halving.
A buy signal has been triggered by the presence of hash ribbons. Source: TradingView.com, BTCUSD| Source: BTCUSD on TradingView.com
The weekly timeframes get more interesting with the buy signal from the hash-ribbons on the daily. Although there could already be a bottom in the market, it has been known that the market continues to fall even after receiving the hash-ribbons buy signal.
LMACD can measure momentum
Yesterday’s close gave us an updated weekly close for BTCUSD. Our analysis will include the Logarithmic MACD. Comparative analysis of past cycles can be done better using the log version.
Although the MACD was green in its previous week of opening, momentum has been slowed by the recent selloff that did not cross the bullish crossover. This week’s MACD has reached historical bear market levels. A further diversification would be unusual and could see Bitcoin fall to $17k.
Can momentum move upwards? | Source: BTCUSD on TradingView.com
Bulls may be able to make the bull cross, but in the past, just a change of momentum could have triggered a bullish impulse. The MACD, currently the top indicator to monitor on a weekly basis is important. A bullish crossover may confirm the bottom but the MACD has a bad reputation as a slow indicator. Therefore, it could take a while before the bull crossover is confirmed.
Ten Year Trend Line
Bitcoin weekly sits at a longer-term trend line that has been in place for more than a decade, which adds credence to the possibility of a bottom. Five occasions have seen the long-term trend line touched, including the bear market bottom in 2014 and Black Thursday March 2020. This trend line loss could spell doom for cryptocurrency markets.
Is this a trend that has been going on for almost ten years?Source: BTCUSD at TradingView.com | Source: BTCUSD on TradingView.com
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Featured Image from iStockPhoto. Charts from TradingView.com