I’m writing this update to do a clarification to the analysis posted the other day, as I had said the support range of the price bands that I use had contracted a bit giving me an area of support of 36-42 thousand dollars, why this? Because I use 60 periods to calculate volatility and more than 60 periods or weeks have passed since the minimum of March 2020 where there was a correction similar to this one, therefore the volatility peak recorded in that bottom of last year is no longer included in the calculation.
Hence the question “How many period to use?” is legitimate, in some cases is smart to fine tune the indicator parameters to better accommodate what is happening (an increase of volatility).
For those who use my indicator with tradingview can verify what i’m saying by themselves by increasing the setting “rms periods” from 60 to 70 for example.
Having said that, the support zone is thus corrected to around 31-40 thousand dollars and I would say that for now it has worked quite well, this means that we are still in the limits and that a trend reversal on the weekly chart is not yet confirmed, so far we are just seeing volatility at work.
We will have to wait until the end of this week and next week to better evaluate the ongoing correction to check if bitcoin price will remain above 31000$ or not.
BTCUSD Weekly Chart