NewsBTC: Bitcoin Price May Be Poised for a Breakout

In this episode of NewsBTC's daily technical analysis videos, we examine a possible breakout of Bitcoin price on linear scale. We also compare the

In this episode of NewsBTC's daily technical analysis videos, we examine a possible breakout of Bitcoin price on linear scale. We also compare the breakout on logarithmic scale to determine if the signal might be a reliable sign the bottom could be in. From our analysis, it appears that the breakout on linear scale could be a reliable sign that the bottom is in for Bitcoin price.

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Is This The Bitcoin Breakout We've Been Waiting For?

Bitcoin's price has broken out of an important downtrend line on linear scale, indicating that the cryptocurrency may be poised for further gains in the near future. The downtrend line connected the peak at $68,000, the top in March at $48,000, and several recent rejections. However, on the lowest timeframes, Bitcoin has pushed outside of this diagonal sloping trend line, indicating that bulls may have the upper hand in the short-term.

It's important to remember that when charting Bitcoin on a logarithmic scale, the trend line may not be as steep as it initially appears. This is due to the fact that logarithmic scale adjusts for price increases or decreases that are not evenly distributed. When looking at the same turning points on a logarithmic scale, the downtrend line appears to be less steep.

Bitcoin's Momentum Compared Using The MACD And LMACD

The logarithmic MACD tool is more effective for comparing past price action and momentum across larger time scales. This is because the regular MACD is not designed for direct comparisons on a linear scale chart. By using the logarithmic version of the tool, you can more accurately gauge the momentum of a security or market.

The LMACD is a more reliable indicator than the MACD, providing signals that are more accurate and timely. In this instance, the LMACD is confirming what the MACD showed long ago - that Bitcoin is in a bullish trend. This shows that the LMACD is a valuable tool for traders and investors who want to make the most informed decisions possible.

Why the log scale shows crypto winter will last several more weeks.

Looking at the historical price action of BTCUSD, it is clear that there have been some massive swings in price over the years. However, on a log scale, these swings appear much less dramatic. This is because on a linear scale, small movements early on appear much larger than they actually are. Nevertheless, the recent breakout on the linear scale does suggest that there could be more upside potential for BTCUSD in the future.

There is very little significance to linear scale when comparing the same type of breakout during past bear markets. In 2018, BTC broke out of several downtrend resistance lines, only to form new ones. In 2014, BTC made it out of the downtrend, only to later retest the line as resistance turned support.

In my opinion, the log scale downtrend lines are more reliable. They show that Bitcoin still has a lot of room to grow before it breaks out of this crypto winter.