Cycle Trading

Summary

• BTC formed a cycle low at day 26 after reclaiming key moving averages
• Price confirmed the move with a close above the 10 day moving average
• BTC then reversed, forming a swing high and breaking back below the 10 day moving average
• The failed follow-through calls the cycle low into question
• A move back above the 10 day moving average is needed to confirm continuation

BTC appeared to confirm a daily cycle low earlier in the week after forming a swing low and reclaiming both the 50 day and 10 day moving averages. This type of price action typically signals that a new daily cycle has begun. — However, the follow-through did not hold.

BTC formed a swing high and closed back below the 10 day moving average, effectively negating the initial confirmation signal. This type of reversal is important, as it introduces uncertainty into the cycle structure and raises the possibility that the decline is not yet complete.

What is clear is that BTC remains in a daily uptrend, but the cycle is now in a fragile state.

From a cycle perspective, failed or incomplete confirmations often lead to additional consolidation or a retest of the lows. This keeps the focus on key levels rather than assumptions. A close back above the 10 day moving average will be needed to re-confirm that day 26 marked the daily cycle low and signal continuation of the uptrend. On the downside, a close below the 50 day moving average would indicate that the cycle decline is extending.

Cycle Alignment

The daily cycle is attempting to turn within an uptrend, but the failed follow-through has weakened the structure.