Bitcoin Is Trading Sideways: Wait for a Breakdown or Breakout

Figure 1. Bitcoin daily chart with detailed EWP count and technical indicators.

Over the past months, I have kept you abreast of the counter-trend rally I anticipated, but with this sideways price action, not much of it has come to fruition other than two rallies to around $45K which were sold. Before I go into the details, please note a simple yet elegant tool to identify trends. Namely, the green and red dotted arrows that show annual changes: from March 2020 to March 2021, BTC moved overall higher.

However, BTC has been trending lower from March 2021 to now (March 2022). These yearly changes, which can be updated for each passing day, help tell us if we should wear a Bullish hat or Bearish cap. In this case, the trend tells us to wear a Bearish cap. Until this annual downtrend changes to up, it is prudent to have a Bearish outlook.

Sideways markets will lead to a directional move.

Markets can go sideways, including those for Bitcoin for extended periods. The bulls and Bears are simply slugging it out. Recognizing this can save one from a lot of headaches as whipsawing markets can quickly lead to financial ruin, which my premium crypto trading members are well-aware of. Hence, one must be patient and wait for either a breakdown or breakout to get a more directional move.

Based on simple symmetry, I can project an upside target of ~$54.3K on a breakout over $44.3K, which fits my preferred more significant bounce scenario. Whereas a breakdown below $34.3K targets ideally around $24K. The latter would then present price action fitting of five waves lower from the November all-time high and could potentially complete a very large irregular expanded flat: blue A, B, C.

Bottom line: Bitcoin has been stuck between a rock and a hard place this year. Uhm, I mean between $34.3 and $44.3K. When crypto markets trade sideways, it is often better to step aside and wait for a breakout or breakdown as not to get caught by the daily whipsaws.

Based on simple symmetry, a sustained (two daily close back above $44.3K) targets ~$54K or higher, whereas a sustained break below $34.3K can target ~$24K. The former should present a bounce high before BTC moves lower again, whereas the latter could mean BTC is gearing up for its next multi-month rally.