Bitcoin has had a complicated trading week after surging towards 109,000 and then falling back towards the 101,000 level.
The warning signs were certainly present as Monday's artificial pump started to unravel amidst a shaky geo-political backdrop.
Source: Biyond.co
Many of our in-house quant indicators were flagging that the move higher was likely to reverse, and especially Biyond Atlas.
Biyond Atlas has gradually been ticking higher this week, strongly suggesting that any up move was highly likely to fizzle out.
Source: Biyond.co
After ignoring previous Atlas warnings (price headed higher alongside Atlas) I decided not to make the mistake and have remained cautious.
So far this cautious approach has continued to pay dividends, meaning waiting for Atlas to turning lower again (bullish signal) before entering a new short conviction position.
One key observation I would like to make this week is that Atlas looks like it's making a run for the Bull Vs Bear marker, around the 100.00 level.
Source: Biyond.co
Given that I am still very bullish on Bitcoin, and expecting 140,000 plus this year I would like to compare former cycles and Atlas.
In 2020 Atlas moved into the Green temporarily (just as did this year) only to reverse back towards the 100.00 Bull Vs Bear trend marker.
Source: Biyond.co
Atlas then failed to moved past this key barrier in 2020 and then turned back towards the Green zone, generating a long-lasting Buy signal.
The rest is history, as Bitcoin and altcoins went into a parabolic frenzy.
I believe something similar is about to happen to Atlas, and this indicator is now building the runway so it can turn substantially lower and provide the adequate percent gains associated with a major bull run.
Source: Biyond.co
So far, the clues are there, with tiny daily percentage gains in Atlas, highlighting that the bear case is not that strong at all.
Atlas currently trades just a few points until the 100.00 zone. Therefore Bitcoin is at a critical juncture in terms of the bull trend.
In the coming week keep a close watch on Atlas, as it could present a major clue as to when the expected ramp higher is coming.
