BITCOIN Do we have a first top ahead?

8 Jan 2021

I hate going into weekends on a not so positive note, but I need to sound an alarm ahead of the 50k barrier. Basically the current study is an extension of a post I published a few months back.

** Fibonacci extensions reveal tops and bottoms **
As you see I've used Bitcoin on the logarithmic scale of the 1W time-frame. I have applied the log Fibonacci extension levels starting from Cycle 1 (2011 - 2013). As seen every cyclical Top (blue lines) and Bottom (green lines) follow a very specific sequence: tops are on a +1 0.272 rate while bottoms on a +1 0.618. More specifically Cycle 1 topped on the 2.272 Fib extension. Then Cycle 2 started with a bottom on the 1.618 Fib ext and topped on the 3.272 Fib. The current Cycle (Cycle 3) made a bottom on the 2.618 Fib and, based on this pattern, is projected to make a Top on the 4.272 Fib, which is around 330k!

** The first top and major pull-back **
What's unique about this application of the Fib extensions, is that every cyclical bottom, prior of being a bottom level, has been a local top. What I mean by that is the .618 Fib sequence (green lines) is where BTC makes a temporary top and has the major pull back of the Parabolic Phase (a-b-c-d-e) of the Bull Run, prior to the Cyclical Top (All Time High). As you see on the chart, this has been the case in 2013 (April top, pull back though June) as well as 2017 (June top, pull back through July).

Now the logical question would be how low can this pull-back get? Both in 2013 and 2017 it has reached the 0.618 Fibonacci retracement level (counting the green line as top and blue line as bottom, and I am only clarifying this because the April 2013 top breached the green line) and the rebounded immediately. The count is clearly seen on the chart, with (b) being the local top, (c) the pull-back's bottom and then (d) the next All Time High (ATH). Assuming that the same structure is followed, then BTCUSD should make the temporary top a little over $50000 (don't exclude breaking it as it happened in 2013), pull back around 28-30k (0.618 Fib retracement) and then continue the Parabola to the ATH extension (4.272 Fib).

** The RSI near the All Time Resistance **
Another indicator showing that we may be approaching the Cycle's first top, is the RSI. As you see it is approaching the 98.50 level, which is the All Time Resistance. It has never been higher than that. Every First Top (red arrows) and ATH (blue arrows) have been on or slightly lower that this Resistance, making a rough Double Top. So keep an eye here.


So what do you think? Will a price around 50k trigger the first major pull-back on Bitcoin? Or are you expecting the parabola to continue straight to the Cycle's next ATH on the 4.272 Fib? Feel free to share your work and let me know in the comments section!


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