In this episode of NewsBTC’s all-new daily technical analysis videos, we are looking at the Bitcoin logarithmic growth curve, the Power Law Corridor, and the 200/100/50-week moving averages.
Check out the video.
VIDEO: Bitcoin Price Analysis (BTCUSD): August 26, 2022
US Fed Reserve Chair Jerome Powell’s speech today is already having an impact on markets, with Bitcoin losing support at $21,000 and in danger of falling deeper into a bear trend. This video zooms out on crypto markets.
Log Growth Curve Continues To Support Price Action
This zoomed-in view shows you the Bitcoin logarithmic curve. The logarithmic curve of growth increases rapidly at the beginning but decreases and becomes more challenging over time. This log growth curve closely relates to the law in diminishing returns.
This is a natural form of growth. Children learn faster than adults, and dieting is easier for children. On the other hand, gains in strength training can be slow but steady over time.
Every bull market has been stopped by the log growth curve, which has supported every Bitcoin price action in history. The log growth curve was broken on Black Thursday, March 2020. On August 20, 2015 Bitcoin fell below it. This led to a bull run. According to legendary investor Sir John Templeton, “The four most dangerous words in investing are, this time its different” Is this time really different?
Source: BTCUSD on TradingView.com| Source: BTCUSD on TradingView.com
Power Law Corridor offers alternative options with lower support
Some might argue that the log curve is subjective – it is. In the video, we’ve chosen to draw the curve across candle closes allowing a wick below. By slightly moving the curve across the wicks, you can create more space at the bottom.
Another longer-term growth model is the Bitcoin Power Law Corridor. It is more subjective. The log curve can be viewed by turning the tool on. The bear market’s bottom for 2018 was located at the current level. However, in 2020 the Black Thursday bottom occurred at the lower end.
The bulls may be in the midst of a power-up Source: BTCUSD tradingview.com | Source: BTCUSD on TradingView.com
Long-term View of The 200/100/50Week MA
Our final look at Bitcoin is taking a long-term view. We will be analyzing moving averages for the 100, 200 and 50-week time periods. Bitcoin is still below its 200-week moving mean, which is a bad sign. This moving average was used in bear market bottom support and may be acting as resistance right now. The 100- and 50-week moving averages are also about to form a death cross – which is the reason for calling out this tool.
When the Bitcoin 100 and Bitcoin 50 Week moving averages crossed, it was clear that the bottom was in and the market started to climb shortly afterwards. Is this the same time?
Are we at a different time?Source: BTCUSD tradingview.com | Source: BTCUSD on TradingView.com
The NewsBTC Trading Course teaches you how to do crypto technical analysis. To access this educational program, click here
Elliott Wave International has Trader Education Week all week. Here is free access to five exclusive videos from one of the world’s best Elliott Wave analysts. The Elliott Wave book is also available for free if you sign up.
Follow @TonySpilotroBTC on Twitter or join Telegram from TonyTradesBTCFor exclusive market information and technical analysis education, subscribe to our newsletter. Please note: Content is educational and should not be considered investment advice.
Featured image taken from iStockPhoto. Charts taken from TradingView.com