Bitcoin - The Macro Diagonal
It's a new month and Bitcoin has produced a new Monthly Candle just below the Macro Diagonal:
The Macro Diagonal is a resistance that tends to reject price in the Pre-Halving period and currently represents the price point of ~$45000.
Because the Macro Diagonal is a diagonal resistance, it will continue to represent lower and lower prices each coming month, arguably making it easier for Bitcoin to break beyond it.
The confluence of this Macro Diagonal with the Four Year Cycle resistance is not coincidental:
The Four Year Cycle is a resistance that tends to reject Bitcoin for three years straight, from Candle 1 all the way to Candle 3, before finally being broken.
The Four Year Cycle resistance in this cycle of ~$46000 (black).
But what's interesting is that the Macro Diagonal was more confluent with the Four Year Cycle last month that it is this month.
And because the Macro Diagonal is going to represent lower and lower prices going forward, the confluence between the Macro Diagonal and the Four Year Cycle is only going to weaken with time.
However, there are only 70 days left until the Halving, so technically two months, which means that the Macro Diagonal will experience a price adjustment only two times before we enter the Post-Halving period.
And it is after the Halving where BTC tends to break beyond this Macro Diagonal, in part due to the Macro Diagonal representing lower prices as time goes on.
Technically, today Bitcoin has begun its last week in the "Pre-Halving Downside" phase (orange) before it finally transitions into the "Pre-Halving Rally" phase (light blue).
Arguably, Bitcoin has already performed the bulk of its Pre-Halving downside in this phase, pulling back -18% in January.
But if any additional downside, or at least a second chance at downside at a Higher Low relative to that $38k low, is to occur, technically it should be during this week.
Let's take a look at Bitcoin's price history to better understand how Bitcoin tends to behave at this moment in the cycle and also how BTC tends to react throughout the Pre-Halving Rally phase.