According to Coindesk, Bitcoin began this year trading at about 1000. The price for Bitcoin went from nearly 20,000 on last Sunday dropping to below 13,000 on Friday. Surely this is the end for crypto currencies, or is it?
I though that it would be interesting to use our cycle band tool on the Bitcoin ETF, GBTC, to see what that tells us.
GBTC closed above the upper daily cycle band on 10/31 to signal a new daily uptrend. Remember that once an asset is in a daily uptrend it will continue in its daily uptrend unless it closes below the lower daily cycle band. So GBTC continued to rally into its peak on 12/19.
GBTC peaked on 12/19, formed a swing high on Wednesday, 12/20. Thursday's close below the 10 day MA confirmed the daily cycle decline.
GBTC printed its lowest point on Friday. The huge bullish reversal that formed eases the parameters for forming a daily swing low. A break above 2015.00 will form a swing low. And if a swing does form then GBTC would have printed a low above the lower daily cycle band, therefore remaining in its daily uptrend. And if it can close back above the upper daily cycle band would then renew the daily uptrend. And if that happens, then I am afraid that people would think that crypto currencies are bulletproof. Which would lead to an even more fantastic hyperbolic advance which would end in even a bigger crash than what was witnessed this past week.