The “Father Of Trend Following” And The Indicator That Says Bitcoin Is Still Bullish

When Bitcoin price is in an uptrend or a downtrend, it is usually obvious and undeniable due to just how powerful things can move. For example, the cryptocurrency soared from $3,800 to $65,000 during the most recent impulse.
Although there was a large setback, a trend-identifying indicator created by the “Father of Trend Following” suggests that Bitcoin is as bullish as ever, and after a defense of an important conflict line, the cryptocurrency is ready to blast off higher.
The Bitcoin Uptrend That’s Not Yet Ready To End
After Black Thursday in 2020, Bitcoin price went on a year-long uptrend that came to a climax this past April around the same time Coinbase Global (COIN) was listed on the Nasdaq.
The first ever cryptocurrency climbed more than 1,500% and reached more than a $1 trillion market cap. The correction wiped out more than 60% of it, and left the market reeling enough to question if the cycle had concluded.
Related Reading | What Bear Market? Bulls Now “In Control” Over Every Bitcoin Timeframe
Mixed signals are everywhere, with many pointing toward a bear market, with others are saying the integrity of the bull market was never quite broken. Sideways price action following the selloff has made the current trend a lot less clear.
However, zooming out using the Donchian Channels technical indicator on monthly timeframes, the uptrend holding becomes a lot more visible – especially when comparing past market cycle tops.

After defending the median, bulls should make a push higher causing the upper band to rise | Source: BTCUSD on TradingView.com
All About The Donchian Channels And How To Use Them
The Donchian Channels indicator was created by Richard Donchian in the mid-20th century. He was later nicknamed “The Father of Trend Following.”
The tool itself is used to help identify trends. An asset begins trending after making it through the median which acts as a line of conflict between bears and bulls. Expansion of bullish or bearish energy then causes the channel bands to widen.
Related Reading | Proof-of-Work: Bitcoin Back Programs That Put Your Money To Work For You
The median is best defined as a “mean” that assets return to after a period of trending. A successful defense of the median, typically results in another wave to the primary trend. If that trend is up, like what Bitcoin price is currently showing, then the upper channel should theoretically expand as prices rises higher.
Past bear markets in Bitcoin began when the median was lost, which caused the asset to trend toward the lower channel band instead. And past bull markets each had several pauses in the upper channel before another push higher was made. Could the recent pullback just be the first of many more to come as Bitcoin climbs toward the eventual climax to the current market cycle?

Donchian Channel on the monthly says #Bitcoin still plenty bullish after defense of the median. Donchia-say you weren’t warned. pic.twitter.com/LMPwBGR5RP
— Tony “The Bull” Spilotro (@tonyspilotroBTC) August 18, 2021

Follow @TonySpilotroBTC on Twitter or via the TonyTradesBTC Telegram. Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com

Avatar

Related Articles

- Advertisement -

Latest Articles

bitcoin
Bitcoin (BTC) $ 27,106.26
ethereum
Ethereum (ETH) $ 1,892.35
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 307.08
usd-coin
USD Coin (USDC) $ 0.999791
xrp
XRP (XRP) $ 0.516673
staked-ether
Lido Staked Ether (STETH) $ 1,890.97
cardano
Cardano (ADA) $ 0.376596
dogecoin
Dogecoin (DOGE) $ 0.072174
solana
Solana (SOL) $ 21.22
matic-network
Polygon (MATIC) $ 0.906297
litecoin
Litecoin (LTC) $ 94.99
tron
TRON (TRX) $ 0.076605
polkadot
Polkadot (DOT) $ 5.27
binance-usd
Binance USD (BUSD) $ 1.00
shiba-inu
Shiba Inu (SHIB) $ 0.000008
avalanche-2
Avalanche (AVAX) $ 14.46
dai
Dai (DAI) $ 0.999042
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 27,125.27
uniswap
Uniswap (UNI) $ 5.07
leo-token
LEO Token (LEO) $ 3.60
chainlink
Chainlink (LINK) $ 6.42
cosmos
Cosmos Hub (ATOM) $ 10.57
okb
OKB (OKB) $ 46.05
monero
Monero (XMR) $ 146.04
the-open-network
Toncoin (TON) $ 1.78
ethereum-classic
Ethereum Classic (ETC) $ 18.07
stellar
Stellar (XLM) $ 0.091806
bitcoin-cash
Bitcoin Cash (BCH) $ 114.45
filecoin
Filecoin (FIL) $ 4.95
internet-computer
Internet Computer (ICP) $ 4.84
true-usd
TrueUSD (TUSD) $ 0.999797
lido-dao
Lido DAO (LDO) $ 2.27
aptos
Aptos (APT) $ 9.06
quant-network
Quant (QNT) $ 117.73
hedera-hashgraph
Hedera (HBAR) $ 0.051061
arbitrum
Arbitrum (ARB) $ 1.23
crypto-com-chain
Cronos (CRO) $ 0.059508
near
NEAR Protocol (NEAR) $ 1.60
vechain
VeChain (VET) $ 0.020018
the-graph
The Graph (GRT) $ 0.132652
apecoin
ApeCoin (APE) $ 3.11
algorand
Algorand (ALGO) $ 0.151912
the-sandbox
The Sandbox (SAND) $ 0.562285
paxos-standard
Pax Dollar (USDP) $ 0.999310
eos
EOS (EOS) $ 0.906214
edgecoin-2
Edgecoin (EDGT) $ 1.00
frax
Frax (FRAX) $ 0.998297
render-token
Render (RNDR) $ 2.62
elrond-erd-2
MultiversX (EGLD) $ 37.60