Notice that this is a logarithmic chart and therefore a logarithmic scale pitchfork. It appears a valid pitchfork for the price as the past prices seemed to react to the parallel and warning line levels and price has honed in on the median line (thick red line) with many tests lately. This pitchfork is drawn from three points: 1.) Bitcoin's starting price from date of incipiency, according to the chart (around $14) 2.) Major pivot low (around $2) 3.) First major pivot high (around $260).
Notice how BTC's all time high hit the upper 0.5 warning line (dotted lines are 0.25 levels, and solid lines are 0.5 levels) almost perfectly. Price has since retracted to test the median line, which is what we would expect of the correction from the ATH in any trading vehicle.
Not a whole lot of channeling has occurred within the pitchfork levels, but there was some, and price definitely did react to the levels, putting in pivot points at, or very near, the pitchfork lines.
Since price has recently broken down through the median line, the next support is the lower 0.25 parallel line (the dotted line right below the current price). However, we can't predict how strong of support it will be as price got little reaction out of it in the past. If you look back to the 2012 to 2013 period you can see that price put in a pivot high from a test of that level to later pierce it, without much, if any, re-testing of that level.
The lower 0.5 parallel line (the first solid line below the current price), on the other hand, does appear to be a strong S/R line, as price had a lot of reaction to it during that same time window. It appeared to act as a line of symmetry to the price, attracting it back after short term gyrations. That might just be the line that price wants to follow long-term.
That being said, price will likely throw in some more tests on the median line in the future. It may happen a few days out, or it may happen 2 or 3 years out. It's not common that a median line be tested from above like it was here without it being tested again a few times from below (as is the case with a horizontal S/R line).
Should the price come back to test the median line around the first day of 2017, that test would happen at around $900/ BTC.
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Still hugging the median line.
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Still hugging the median line.
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She's still showing clear supports on the median line and nearest parallels. Signaling a strong area to buy (long-term), all along the current parallel that it has been testing.
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She's still tracking that line like there's a magnetic attraction there. Promising predictor of future price, IMO.
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JamesBrown
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She's still showing clear supports of the median line and nearest parallels. Signaling a strong area to buy (long-term).