Will bitcoin capitulate or not?

The yearly close was not the best for bullish short-term.

Here we have monthly chart with the moving averages from six months and one to eight years. Last time I wrote, “If we close the monthly below the one year and two year averages then there is a chance that we are facing more down possibly to the 4 year average at about $5k.” This close below those one year and two year averages realized in the end of the year so let’s examine bearish scenarios.

There are also yearly opens with white solid lines and fibonacci retracements from 20k to 3k (white) and from $3k to $14k (yellow).

Weekly chart with the same tools. On weekly chart we have clear short term range formed, marked with dotted lines. Weekly close above or below would define the start for the mid-term move most likely.

What makes me more bearish for short-term is that the range is below both 1 year (yellow) and 2 year (orange) averages. It is a decent setup for a capitulation and a panic drop to at least 4 year average at $5k. After such drop I expect price recovery back above the yearly open and the averages like you can see in the chart on the left side where the bottom at $3k can be seen.

Daily chart close up with the same tools. If we start closing daily candles above the orange 2 year average and then the weekly top range line then I will change my mind to more bullish. In this case capitulation or any kind of down move would probably be cancelled and we could very well start a strong rally.

There are some nice daily trendlines here too in play that might be worth following.

Why bitcoin is one of the best investments in the world today and why technical analysis works (simply explained)

Writer Toni Kosonen

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