Cycle Trading

PRE-SUMMARY

BTC signaled a daily cycle decline before rebounding sharply off day 45 low. The rebound raises the possibility that the DCL may already be in place.

BTC had been consolidating between resistance at the 200 day moving average and support from the 10 day moving average until Tuesday.

BTC closed below the 10 day moving average on Tuesday, then broke below the daily cycle trend line on Wednesday to signal the daily cycle decline. Wednesday marked day 45 for the current daily cycle, placing BTC very deep in its timing band for a DCL.

From a cycle perspective, BTC should still go on to turn the 10 day moving average lower in order to complete its daily cycle decline. However, BTC failed to deliver bearish follow through on Thursday and instead delivered a bullish surprise by forming a swing low while beginning the process of reclaiming the 10 day moving average.

What is clear is that BTC remains in a daily uptrend. BTC will remain in its daily uptrend unless it closes below the lower daily cycle band. However, the close proximity of the declining 200 day moving average creates an important near-term inflection point for the current cycle structure.

If BTC closes back above the 200 day moving average, then it would indicate a continuation of the daily uptrend and signal a cycle band buy signal. That would also have us label day 45 as the DCL.

Cycle Alignment:

• Bullish