I’ve only posted about BTC once before, back on Mar 23 in response to a member request [see: FOMC Embraces MMT.] The Dow was about to test its 2016 election day lows and, not coincidentally, the Fed had just unleashed QEinfinity.
The post went as follows:
Two major chart patterns jump out at me: first, the obvious triangle pattern on the weekly arithmetic chart (it isn’t there on the log chart) suggests BTC should bounce from here and return to the top trend line (which failed, BTW, to hold a recent tiny breakout.) It currently stands around 9,925.
Second, the daily log chart shows a TL was broken last week but BTC has since rebounded back above it. For those wondering, the retracement of the rise from the Dec 2018 lows to the Jun 2019 highs reached about 81%. Had the TL held, we’d be looking at a Fibonacci 78%.
If you believe that BTC will necessarily rise (as gold will) as QE explodes, the charts support a continuing bounce. If you believe the FOMC will do whatever it takes to support the USD and crush surrogates such as BTC and GC, then keep an eye on that TL (5,000ish) as a fairly clear stop level.
Having spent a few hours studying Bitcoin, I promptly forgot about it. I don’t really follow it, and believe it’s at least as heavily manipulated as everything else. Probably more. But, thanks to member John K., I was encouraged to take another look.
As it turned out, BTC did continue its bounce and went on to test the top trend line, reaching 9917.25 on May 8. It was an impressive 100% move from the March lows.
Of course, now it’s back at overhead resistance – the same trend line from December 2017 which halted the 2017 and 2019 rallies.
We’ll take a look at the potential for a reversal or a breakout.
continued for members…As before, it matters whether you’re looking at a log chart or an arithmetic chart. The arith chart below shows BTC bouncing off a great little trend line from the March lows.
If we chart it in log terms, several TLs have broken down (though BTC has subsequently moved higher each time.) 
BTC has clearly failed to break out above the TLs from both the 2017 and the 2018 highs. The level of QE thrown at the markets certainly argues for a breakout. But, central banks have a vested interest in keeping currency alternatives from gaining too much prominence. When a county’s currency breaks down, the game is over.
The BLX chart below underscored the importance of the recent highs – very nearly nailing the .618 Fib of the drop between July and March.
Is BTC a buy here on a potential breakout? Maybe. But, given the fact that it’s barely off its April highs, cautious types might want to wait for an actual breakout. If it occurs, there would be a small opportunity loss from not getting in here. But better to give up a few percent than lock in a trade with a lot more downside.
The alternative for more nimble types: go long but watch that rising TL from Mar 16 on the arith chart like a hawk. If BTC drops below it, run for the hills.
GLTA.