Cycle Trading

Pre-Summary

BTC appeared to begin its daily cycle decline after forming a swing high and closing below the 10-day MA on Tuesday. But the expected decline failed to develop. Instead, BTC formed a swing low on Thursday and delivered a bullish breakout from consolidation.

BTC became stretched above the 10-day MA following its August rally. It then began consolidating below the 80,000 level, allowing the 10-day MA time to catch up to price.

BTC formed a swing high and closed below the 10-day MA on Tuesday to signal its daily cycle decline. BTC then printed its lowest point on Wednesday, Day 32, placing it in its timing band for a DCL.

Normally, BTC should turn the 10-day MA lower in order to complete its daily cycle decline. That did not happen.Instead, BTC formed a swing low on Thursday and broke back above the 10-day MA while also breaking bullishly out of consolidation. That changes the evidence.

BTC is currently in a daily uptrend. The bullish breakout indicates a continuation of the daily uptrend and signals a cycle band buy signal. We will therefore label Day 32 as the DCL. The peak on Day 27 also results in a right-translated daily cycle formation.

Rather than extending its daily cycle decline, BTC quickly resolved the consolidation higher. The market provided the evidence.

Current Framework

Trend: Daily uptrend.

Cycle: Day 32 DCL.

Structure: Bullish breakout from consolidation.

Translation: Previous daily cycle right translated.

Next: Bullish follow through would strengthen the new daily cycle advance.

Editor’s Note

Today’s bullish action aligns with a Week 17 ICL for Stocks, along with the June YCL for Precious Metals.