Cycle Trading

Pre-Summary

Gold and Bitcoin both recently signaled their daily cycle lows. Since then, Bitcoin has delivered immediate bullish follow-through while Gold has taken a more measured path. The difference illustrates why confirmation and follow-through are separate pieces of evidence.

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In The Hurdle Has Been Cleared, we saw Gold and Bitcoin provide the evidence needed to label their daily cycle lows.

Now we can observe what happens next.

Bitcoin printed its lowest point on day 45, placing it deep in its timing band for a DCL. Bitcoin formed a swing low and broke bullishly out of consolidation to close above the 10 day MA on Friday, signaling day 45 as the DCL.

Bitcoin delivered bullish follow-through on Monday.

Price has moved sharply higher and is now stretched above the 10 day MA. Bitcoin will likely need to consolidate in order to allow the 10 day MA time to catch up to price.

Bitcoin is currently in a daily uptrend. Forming a swing low and closing above the 10 day MA indicates a continuation of its daily uptrend and signals a cycle band buy signal.

Gold has behaved differently.

Gold signaled day 43 as its DCL, but its 10 day MA had declined steeply into the low. Before the 10 day MA can turn higher, it first needs time to flatten.

That process appears to be underway.

Gold continues to hold above its day 43 DCL while the 10 day MA is beginning to flatten. The bullish TSI crossover provides additional support for the developing cycle.

Gold does not need to respond exactly like Bitcoin for its DCL interpretation to remain valid.

Confirmation tells us where the low formed. Follow-through tells us how the new cycle is developing.

Bitcoin is providing that follow-through through price expansion. Gold is providing it through a more gradual repair of its daily structure.

Different paths. Same process.

Cycle Alignment

Bitcoin: Day 45 DCL confirmed; strong early-cycle follow-through within the Daily uptrend.

Gold: Day 43 DCL confirmed; early-cycle structure developing as the 10 day MA begins to flatten. Reclaiming the upper daily cycle band would strengthen the new-cycle advance.