Cycle Trading

Pre-Summary

Last week, Bitcoin entered its Daily Cycle Low (DCL) timing band and formed a swing low, but the market had not yet provided the evidence needed to signal the DCL. This week, the market provided that evidence.

Bitcoin printed its lowest point on Day 31, placing it within its normal Daily Cycle Low timing band. After forming a swing low, Bitcoin continued to strengthen and closed above both the 50-day and 10-day moving averages.

A Daily Cycle Low is not identified by timing alone. Timing bands identify where a cycle low may develop, but the market determines where the cycle actually bottoms through its price action. By forming a swing low and closing above the 10-day moving average, the market provided the evidence required to signal Day 31 as the Daily Cycle Low.

Because Bitcoin remained in a daily uptrend throughout the decline, signaling the Daily Cycle Low represents a continuation of the existing uptrend rather than a trend reversal. The close above the 10-day moving average also signals a cycle band buy signal, indicating that a new daily cycle is underway.

This sequence demonstrates the importance of evidence rather than anticipation. Entering a timing band identifies where a cycle low is likely to occur. Waiting for the market to provide the evidence allows the cycle to be labeled based on what the market has done rather than what we expect it to do.

Current Framework

Trend: Daily uptrend remains intact.

Cycle: Day 31 has been signaled as the Daily Cycle Low following a swing low and close above the 10-day moving average.

Next Trigger: Watch for the 10-day moving average to turn higher as Bitcoin advances through the new daily cycle.