Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 2.70% and -2.51% , respectively. The estimated daily return in both directions based on their probability of occurrence is 1.42% and -1.18% . Yesterday’s return was -1.02% , which is below the first standard deviation. Our scoring is currently negative (-2 ) for the month-on-month change and -1 for price indexation. Both scorings range from -3 up to 3 , which means that we estimate the declining phase of the cycle. The development of the estimated cycles based on our analytical system is shown in the following chart.
Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. According to the long-term MA, BTC/USD is still in a bullish sentiment. However, the short-term and medium-term MAs may present resistance to market price.
Since the creation of the last all-time high, we have witnessed more downward trends, with the maximum level reaching 4 consecutive days. However, the maximum decrease was 6 days in the measured period. The upward trend in recent weeks have not exceeded more than 3 days. The maximum for the last 3 years is 8 days. We could use the average long-term ATR (Average True Range) obtained from daily data (6.42% ) to estimate Stop Loss orders for our positions. The current value is 4.41% , which is below average. Approximately 90% confidence interval (return between -6.00% and 7.00% ) is shown in the histogram below by a red rectangle.
We could use the last decile of low to high returns (12.00% ) to estimate Profit Targets, as shown in the chart below.
After a dynamic decline in early December, basic technical analysis still supports short-term bearish sentiment. BTC/USD is currently again very close to the long-term moving average and the Fibonacci retracement level of 38.20% . The price is still below the short-term MA. If the market price tests the last lows in December, it could gain support at the psychological level of 40 000 , where is also the Fibonacci retracement level of 50.00% . Further down is the important demand zone (green rectangle). However, in the case of growth, the level to be overcome is 56 000 .