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Bitcoin (BTC/USD ) statistical and technical analysis

The first days of new year did not bring much volatility to this cryptocurrency. From a technical point of view, the market price has stabilized in recent days. The current price of Bitcoin / U.S. Dollar is 45 850 (January 03, 2021). Let’s now look at statistical and technical analyzes.

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.

BTC/USD daily price indexation Source: WALFIR

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.

BTC/USD daily price development Source: WALFIR

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.

BTC/USD daily return distribution Source: WALFIR

We could use the last decile of low to high returns (12.00% ) to estimate Profit Targets, as shown in the chart below.

BTC/USD daily low to high distribution Source: WALFIR

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 .

BTC/USD technical analysis Source: TradingView

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...

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