Bitcoin Failed To Hold Its ‘Reversion To The Mean’ At This Week’s Open. How To Trade It Now?

Bitcoin
BTC
/US Dollar FX Spot Rate (BTC=) began this week below its 200-week simple moving average at 22,693.30, which I consider its “reversion to the mean.” It set its all-time weekly high of 68,999.99 during the week of November 14, 2021. From this high BTC set its 2022 low of 17,588.88 during the week of June 19, 2022. This was a huge decline of 74.5%.

During the week of July 24, the rebound high was 24,738.46. This was a gain of 40.6%. BTC is below its annual pivot at 33,032 and above its weekly and monthly value levels at 16,729 and 14,202, respectively.

The Daily Chart for Bitcoin

Bitcoin set its all-tine intraday high of 68,999.99 November 10, 2021. This was a negative ‘key reversal’ day as the close that day at 64,268.40 was below the prior day’s low of 66,106.95.

During the decline since then a death cross occurred on January 15,2022 when the 50-day simple moving average declined below the 200-day simple moving average. This death cross remains on the chart today.

After trading as low as 32,950.72 on January 24, 2022, BTC rebounded to 48,226.46 nearly testing its 200-day SMA at 48,253.93 on March 28. BTC subsequently fell to its 2022 low of 17,588.88 set on June 18.

The 50-day and 200-day SMAs are now at 22,184 and 34,616. The horizontal lines from top to bottom are the quarterly risky level at 58,902, the semiannual risky level at 44,242 and its annual pivot at 33,032.

The Weekly Chart for Bitcoin

The weekly chart for bitcoin remains negative but oversold. It’s below its five-week modified moving average at 23747 and below its 200-week simple moving average or ‘reversion to the mean’ at 22,692. The weekly and monthly value levels are shown at 16,729 and 14,202.

The 12x3x3 weekly slow stochastic level is rising at 16.21 which makes bitcoin oversold. The reading below 15.00 on a scale of 00.00 to 100.00 makes bitcoin ‘too cheap to ignore.’ It was below this milestone last week.

Trading Strategy: Buy bitcoin on weakness to its weekly and monthly value levels at 16,729 and 14,202. Reduce holdings on strength to the annual pivot at 33,032.