Are we ready to but our bull masks on? Let's take a look at some analysis on COINBASE:BTCUSD on the log chart, daily candles.
Why do I use the log chart? It gives the most touches for lines, and it does a much better job of predicting long-term trends of BTC and ETH, where network effect causes exponential growth and decay. Let's look at the analysis.
The BTC chart is interesting because it has so much history. This history is summed up best by a series of exponential support lines (straight lines on the log chart) of continually steeper slope. In the chart I have the longer term support lines shown with a thicker black line. Shorter term support lines are thinner. The shortest-term support line is a thin grey support line which has been holding since February 5th.
I have drawn two descending resistance lines in this chart. One is from the all-time high in December down to the second peak in January. The other is from the all-time high in December to the third peak on February 20. The bulls have tried to penetrate the lower of these two lines on December 20 and today, March 1. At the time of writing, the $10,960 level was penetrated but did not hold.
My take is that the the grey upward sloping support line will not hold due to it being shorter-term than the descending resistance lines. If it breaks, a retrace to ~$7300 and test of the longer-term support is possible. My view will be invalidated if the price closes in the next couple days above $10,960. Then it must climb to $11,600 and close above there in order to break through the second resistance.
Let me know if you agree. Be safe out there.
1. From all time high to second peak
2. From second peak to third peak.
After updating my chart to the above, it was clear that BTC/USD broke through the first resistance line and then found support on this line a few hours later. Finding support there could have been taken as a buy signal with a target of ~5% increase at the next resistance line.
Looking forward to see if BTC/USD can break through again and complete the inverse H&S that everyone is calling :).
Be safe out there.