Bull trap? Return to normal OR Return to mean
Updated
In 2014, Bitcoin crossed a 'Downwards Trendline'. Which was positive at the time.
In hindsight it was a bull trap. The second half of the multi year bear market ensued. This was indicated by the 20/50 week MA cross over.
Back then, the breakout of the downwards trendline now shows it was a false a period of over optimism. The classic 'return to normal' phase of a bubble. Before fear, panic, capitulation, and finally return to mean.
Question. Are we in a bull trap? The 'Return to normal' of a bubble? Could a similar scenario could play out to 2014? Or have we bounced off the 50 week MA and started a new bull run and already returned to the mean at $6500?
I'm still cautious right now because there are signs of 'return to normal'. People are once again throwing money are the alt coin market. As of writing, EOS has a market cap of $15.7 billion. Is this a sign of bullishness, or are we seeing over optimism like in 2014. Even Bitconnect went up 300% in value. I'm slightly concerned about the Initial Coin Offering bubble and Altcoin bubble we are seeing.
But let's see how things play out. Maybe EOS at $15.7 billion is fantastic value!!
For the bulls, we could have bounced of the 50 week MA and be on our way up. If we go above 11.8 k that would be very strong for the bulls. Not much resistance above those levels.
For the bears, history could repeat and we head lower to the $4800 fib support bear target. $4800 could be the 'Return to mean' price as seen from the trendlines moving up from the previous bull market. If $4800 is the return to mean price, $2500 fib could be capitulation.
I am currently neutral until it's clearer if we are at 'Returned to mean' or 'Return to normal'.
Im going to check back in a few months and see if history repeats, or we are on the way to all time highs.
In hindsight it was a bull trap. The second half of the multi year bear market ensued. This was indicated by the 20/50 week MA cross over.
Back then, the breakout of the downwards trendline now shows it was a false a period of over optimism. The classic 'return to normal' phase of a bubble. Before fear, panic, capitulation, and finally return to mean.
Question. Are we in a bull trap? The 'Return to normal' of a bubble? Could a similar scenario could play out to 2014? Or have we bounced off the 50 week MA and started a new bull run and already returned to the mean at $6500?
I'm still cautious right now because there are signs of 'return to normal'. People are once again throwing money are the alt coin market. As of writing, EOS has a market cap of $15.7 billion. Is this a sign of bullishness, or are we seeing over optimism like in 2014. Even Bitconnect went up 300% in value. I'm slightly concerned about the Initial Coin Offering bubble and Altcoin bubble we are seeing.
But let's see how things play out. Maybe EOS at $15.7 billion is fantastic value!!
For the bulls, we could have bounced of the 50 week MA and be on our way up. If we go above 11.8 k that would be very strong for the bulls. Not much resistance above those levels.
For the bears, history could repeat and we head lower to the $4800 fib support bear target. $4800 could be the 'Return to mean' price as seen from the trendlines moving up from the previous bull market. If $4800 is the return to mean price, $2500 fib could be capitulation.
I am currently neutral until it's clearer if we are at 'Returned to mean' or 'Return to normal'.
Im going to check back in a few months and see if history repeats, or we are on the way to all time highs.
Note
The breakout of the downwards trend line turned out to be a Bull Trap. Traders bought in a got a nice trade to the upside but needed to get out quick. Sometimes TA is just wishful thinking. A lot of twitter traders probably thought the Bull market was back as soon as the line was crossed, but it was only a matter of time before the move failed.
The bubble appears to be still bursting.
We haven't had the 20/50 week death cross yet. But Bitcoin is currently below both averages which is not a good sign.
Trade closed manually
If you shorted, you could take profits now because we reached the 6k bottom. There is a potential re-short if 5900 breaks.
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