The downside warnings began on November 10, 2021, after setting its all-time intraday high of 68,999.99. The day’s low was 62,856.71 with a close of 64,268.40. The close was below the prior day’s low of 66,106.95. This was thus a key reversal sell signal.
The downside for the first day of this week has been 22,580.41 versus the 200-week simple moving average at 22,277.01. I consider this moving average as the ‘reversion to the mean.’
The Daily Chart for Bitcoin
Bitcoin was above a golden cross formation 52 weeks ago. This ended with a death cross formation confirmed on June 19, 2021, when the 50-day simple moving average fell below the 200-day simple moving average.
Volatility is noted by a golden cross on September 17, 2021. With the 50-day SMA back above the 200- day SMA additional upside was likely. This led to the all-time intraday high of 68,999.99 set on November 10, 2021. This was a key reversal day with the close of 64,268.40 below the November 9 low of 66,106.95. This sell signal led to a death cross confirmed on January 15, 2022.
The 200-day SMA was a resistance on March 28 at 48,253.93. This was a level at which to sell bitcoin.
The horizontal lines from high to low are the quarterly risky level at 65,449. The monthly risky level for June is at 43,635. The annual pivot at 33,031. The semiannual pivot at 28,763. And, this week’s pivot at 24,128.
The Weekly Chart for Bitcoin
The weekly chart for bitcoin is negative but oversold. It’s below its five-week modified moving average at 31,009. It’s close to testing its 200-week simple moving average or ‘reversion to the mean’ at 22,277.
The 12x3x3 weekly slow stochastic level is declining at 18.34 which makes bitcoin oversold. If this reading falls below 15.00 on a scale of 00.00 to 100.00, bitcoin becomes ‘too cheap to ignore.’
Trading Strategy: Buy bitcoin on weakness to its 200-week SMA or “reversion to the mean” at 22,277. Reduce holdings on strength to its annual pivot at 33,032.
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