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.
Take a look at the video below:
VIDEO: Bitcoin Price Analysis (BTCUSD): October 6, 2022
Is This The Bitcoin Breakout We’ve Been Waiting For?
Bitcoin price has broken out of an important downtrend line on linear scale. The downtrend line connects the peak at $68K, the top in March at $48K, and several recent rejections. On the lowest timeframes, Bitcoin has pushed outside of this diagonal sloping trend line.
Before bulls begin to celebrate, BTCUSD is best charted on logarithmic scale. Switching to log scale immediately makes the trend line seem obsolete. Moving the trend line across the same turning points in the market, produces a lot less steep of a downtrend line.
Linear scale breakout leaves room leftover in log scale | Source: BTCUSD on TradingView.com
BTCUSD Momentum Comparison Using The MACD And LMACD
The standard MACD tool also makes sense to use with a linear scale chart. But if you want more direct comparisons of momentum across larger time scales, you also need to use a logarithm version of the tool. Using the regular MACD to compare past price action isn’t practical.
The LMACD also tends to provide more reliable signals. For example here, Bitcoin has already crossed bullish on the MACD long ago, while the LMACD is only about to confirm after several more weeks of sideways.
Why The Log Scale Shows Several More Weeks Of Crypto Winter
A historical view of linear scale versus log scale shows the difference between the two types of charts across BTCUSD price action. On the linear chart, anything prior to 2017 looks like a flat line, meanwhile there were price swings of thousands of percent up and 80 to 90% down several times over. But again, there is that breakout.
Comparing the same type of breakout during past bear markets shows that there is very little significance on linear scale. 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.
Diagonal downtrend lines in log scale are endlessly more reliable. The log downtrend lines in linear scale show that Bitcoin has a lot more to go before it breaks free of this crypto…
Click Here to Read the Full Original Article at NewsBTC…
