BTCUSD: Will History Repeat for Bitcoin?

·    May 5, 2020

·      May 5, 2020

·    May 5, 2020

It’s difficult to find a more polarizing topic than that of Bitcoin.

You either believe in it, or you don’t.

But in all of my research, I would say the vast majority of people simply don’t understand it.

While I’m not going to get into what Bitcoin is, how it works, or its use cases in this post, I do encourage everyone to learn about it.

Unlike most of what I discuss on this site, I’m approaching Bitcoin as more of an investment rather than a trade.

As such, you should have a basic understanding of it if you’re going to buy and hold for the long-term.

Perhaps a deep-dive into Bitcoin is a good idea for a future post.

But whether you believe in Bitcoin or think it’s a waste of time, no market technician on earth can deny its potential based on technicals alone.

Let’s start with the fact that Bitcoin has already proven its bullish potential over the last decade.

Bitcoin multi-year chart showing channel
Bitcoin weekly time frame

The key, like any trade or investment, is timing.

Those who chased Bitcoin above $15,000 in late 2017 didn’t do so well.

However, if you study the chart above, you’ll notice a distinct pattern apart from the ascending channel.

You see, every four years, the Bitcoin market undergoes a halving.

Despite sounding like a Stephen King novel, it’s actually appropriately named, and quite simple to understand.

Every four years, the number of Bitcoins issued by the network gets cut in half.

In other words, the supply decreases.

This halving occurred on November 28th, 2012, and again on July 9th, 2016.

If you notice in the chart above, the last two multi-month rallies from Bitcoin were preceded by halvings.

The first halving took the price of Bitcoin from $12 in November 2012 to over $1,100 in November of 2013.

The second halving took the price of Bitcoin from $650 in July of 2016 to nearly $20,000 in December 2017.

Do you see the pattern?

Both of those events triggered incredible rallies that topped out at the end of the following year.

As you might have guessed, the next halving is just around the corner.

In fact, the third halving is occurring within the next ten days on May 11th.

I’m not stating that Bitcoin will rally as it did following the first two halvings.

I’m also not claiming that the channel above will hold.

But even if there’s a 50% chance that Bitcoin will repeat history for the third time, the risk to reward ratio demands your attention.

On a risk-adjusted basis, it’s a bet I have to take, which is why I’ve been accumulating Bitcoin since early April when the price was below $7,000.

I’ve been explaining everything in the BTCUSD member-only forum.

For those looking to play a technical breakout, the wedge pattern below will give you all the clues necessary.

A sustained move above wedge resistance is what will send Bitcoin higher.

Key resistance above that comes in at $12,800, followed by $19,700.

As for key support, keep an eye on the area between $7,700 and $8,300.

If you want to see exactly how I’m buying Bitcoin, as well as my long-term target, join us in the member’s area.

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Bitcoin wedge pattern
Bitcoin weekly time frame

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