A prominent Bitcoin (BTC) trader predicts that the cryptocurrency won’t experience a 2019-like fakeout rally in the current market cycle.
Pseudonymous trader Dave the Wave tells his 140,000 followers on social media platform X that the 2019 fakeout rally was caused by a sudden Bitcoin breakout after only spending months in the “buy zone.”
The “buy zone” is the trader’s own version of logarithmic growth curves (LGC), which aim to plot the highs and lows of Bitcoin’s long-term market cycles while filtering out short-term volatility and noise.
However, the trader says this cycle Bitcoin has already spent more than a year in the “buy zone,” setting the stage for a sustained bull rally.
He also bases his thesis on the monthly moving average convergence divergence (MACD), which is a momentum indicator that can signal the reversal of an asset’s trend.
“Those that have followed me for some time may remember my calling of the 2019 BTC spike as a ‘mini bubble’. This was based on the LGC model, where the price moved too quickly/parabolically out of the buy zone.
This time, no such thing. Even if prices should decline a little more in the short term, the weekly MACD [a lagging indicator] suggests a risk-managed buy for the investor.”
Looking at his chart, the trader thinks BTC remains in bearish territory but since the MACD line is nearing the zero line from above a bullish reversal could be coming soon.
The trader also says that the LGC model is proving to be a reliable indicator of BTC’s price action.
“So far, the LGC model, as drawn since 2018, could not have performed better in both projecting the range of price… and predicting the best time to be buying. This statement is indisputable … based as it is on prediction and performance.”
The trader previously predicted Bitcoin will go on a bull rally in 2024.
Bitcoin is trading for $26,413 at time of writing, up 0.8% in the past 24 hours.
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The post 2019-Style Bitcoin Fakeout Unlikely As BTC Flashes Healthy Long-Term Indicators, Says Top Analyst appeared first on The Daily Hodl.
