Cycle Trading

Pre-Summary

Inflection → DCL vs divergence + trend test

BTC printed its lowest point on Wednesday, day 31, placing it in its timing band for a daily cycle low.  From a cycle perspective, BTC did not follow the typical path of turning the 10 day moving average lower into a decline. Instead, it formed a swing low and closed back above the 10 day moving average on Friday. Given that BTC is in a daily uptrend, this initially supported labeling day 31 as the daily cycle low.

However, the structure has become less clear. The presence of bearish divergence on the oscillators suggests that Monday may represent day 36 of the current cycle rather than the start of a new one.  Confirmation will be needed. A swing high followed by a break below the daily cycle trendline would signal that the daily cycle decline is underway.

What is clear is that BTC remains in a daily uptrend while holding above key support levels. However, the divergence introduces risk that the current move may be late in the cycle rather than early.  If BTC holds above the lower daily cycle band, then the uptrend remains intact. If a swing high forms and price breaks below the daily cycle trendline, then the daily cycle decline would be in progress.

Cycle Alignment

Mixed