Preface: Many would argue that Bitcoin's current stage of it's lifecycle is coming to an end as it evolves into whatever comes next as the crypto market sees broader adoption, utility and trust. I know some will argue this point, but I believe you can support this with facts and hard math. You can see weaker growth and corrections each cycle, you see the floor rising both from a semantic perspective and price, you see Bitcoin and other cryptocurrencies/tokens being invested and held long term, in some cases locked up for years with stuff like Curve.
Analysis: This brings us to the 20/21w MA support band, everyone's favorite macro bull market support level. Price over them, its generally bullish. Price under them, its generally bearish.
Observed on higher timeframes / historically they are a clear indicator of market sentiment and you can use their crosses over each other to indicate if that is rising bearish or bullish sentiment. When the 20w SMA crosses above the 21w EMA, that is bearish. When the opposite occurs, its bullish.
In the chart above, I marked the 20/21w MA bearish crosses, and the period of time after that cross until the MAs inverted bullish again (following a recovery of price). If you go back to early Bitcoin cycles, the 20/21w bearish cross led to a selloff/drawdown in the market for around 400 days based on this measurement.
But with each cycle the duration of the bearish market drawdown averaged 17% shorter duration. This brings us to 2021 when our last bear cycle lasted only 122 days from April/May until August after price started to rally again and the 20/21w MAs cross bullish once more.
Prediction: If that pattern continues to play out and bulls can't muster a strong rally in the near term; and we assume each bearish cycle continues to follow a pattern being ~17% shorter than the last, we will log a few months of muted to bearish price action before a rally leads to another 20/21w bullish cross. This will occur in around 100 days (3rd week of March 2022). And because the moving averages are lagging indicators, we see indicators of this ahead of time by logging a macro bottom bulls rallying earlier than that, possibly as early as January or February
Analysis: This brings us to the 20/21w MA support band, everyone's favorite macro bull market support level. Price over them, its generally bullish. Price under them, its generally bearish.
Observed on higher timeframes / historically they are a clear indicator of market sentiment and you can use their crosses over each other to indicate if that is rising bearish or bullish sentiment. When the 20w SMA crosses above the 21w EMA, that is bearish. When the opposite occurs, its bullish.
In the chart above, I marked the 20/21w MA bearish crosses, and the period of time after that cross until the MAs inverted bullish again (following a recovery of price). If you go back to early Bitcoin cycles, the 20/21w bearish cross led to a selloff/drawdown in the market for around 400 days based on this measurement.
But with each cycle the duration of the bearish market drawdown averaged 17% shorter duration. This brings us to 2021 when our last bear cycle lasted only 122 days from April/May until August after price started to rally again and the 20/21w MAs cross bullish once more.
Prediction: If that pattern continues to play out and bulls can't muster a strong rally in the near term; and we assume each bearish cycle continues to follow a pattern being ~17% shorter than the last, we will log a few months of muted to bearish price action before a rally leads to another 20/21w bullish cross. This will occur in around 100 days (3rd week of March 2022). And because the moving averages are lagging indicators, we see indicators of this ahead of time by logging a macro bottom bulls rallying earlier than that, possibly as early as January or February
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.