Anatomy of a Bear Market 2018: We Bearly Made It
In the Anatomy of a Bear Market Series I compare different Bitcoin Bear markets between several years.
The 2018 Bitcoin Market has played out as Bear and it is likely to continue through winter while bears take a long nap in their caves.
Its structure is similar to the 2014 Bear Market. Of course, they are different markets, reflecting different times, but still consist of the same common elements.
Both markets have several S/R points supported by a trend line, a flash crash, comparable down channels, matching EMAs and fib levels.
However we didn't have a proper prev high retest in 2018. Here's what can happen with Bitcoin in 2019 based on history of 2014 Bear Market.
We can be in either P1 or P2 points of 2014.
- based on W1 EMA200 and fib level 88.6% we're currently sitting on, it's P2
- based on lack of volume, we're somewhere around P1, just sitting on top of another W1 EMA100 instead of W1 EMA200. So, the price may drop to W1 EMA400 and that's also a matching fib level
Conclusions:
- If the current bear market plays out as 2014, we won't see a bull run until Sep 2019.
- We will likely bottom out in March 2019
- Although some analysts predict a bounce up from W1 EMA200 and 15K by the year end, this is likely just to calm down the investors.
- It may seem like a capitulation but it's not. There was no significant rebound and we could see more/increasing volume.
- There's no negative FUD in the media, good news show up while bad news are postponed.
- To spot the bottom look for an increase in high volume spikes/candle size (supply absorption, accumulation), extreme levels on W1, D1 RSI, and multiple macro divergences on high TFs.
- Even higher volume at the top implies distribution and bounce back for another drop down soon.
- We can still drop further, for example to W1 EMA400. And it's another 88.6% fib level when pulling a macro fib from the 2014 bottom ATL
Targets:
bear target1: 3000-3300
bear target2: 2000
bull target: 5500 (retest of prev high)
There are also algo targets and supply zones supporting these levels.
Good Luck!
Please don't trade based only on my analysis. This is not a financial advice. Do you own research to confirm.
I'm using BLX full history with enough bars to show W1 EMA/SMA on D1
view the 2014 Bear screen or scroll the chart to the left:
The 2018 Bitcoin Market has played out as Bear and it is likely to continue through winter while bears take a long nap in their caves.
Its structure is similar to the 2014 Bear Market. Of course, they are different markets, reflecting different times, but still consist of the same common elements.
Both markets have several S/R points supported by a trend line, a flash crash, comparable down channels, matching EMAs and fib levels.
However we didn't have a proper prev high retest in 2018. Here's what can happen with Bitcoin in 2019 based on history of 2014 Bear Market.
We can be in either P1 or P2 points of 2014.
- based on W1 EMA200 and fib level 88.6% we're currently sitting on, it's P2
- based on lack of volume, we're somewhere around P1, just sitting on top of another W1 EMA100 instead of W1 EMA200. So, the price may drop to W1 EMA400 and that's also a matching fib level
Conclusions:
- If the current bear market plays out as 2014, we won't see a bull run until Sep 2019.
- We will likely bottom out in March 2019
- Although some analysts predict a bounce up from W1 EMA200 and 15K by the year end, this is likely just to calm down the investors.
- It may seem like a capitulation but it's not. There was no significant rebound and we could see more/increasing volume.
- There's no negative FUD in the media, good news show up while bad news are postponed.
- To spot the bottom look for an increase in high volume spikes/candle size (supply absorption, accumulation), extreme levels on W1, D1 RSI, and multiple macro divergences on high TFs.
- Even higher volume at the top implies distribution and bounce back for another drop down soon.
- We can still drop further, for example to W1 EMA400. And it's another 88.6% fib level when pulling a macro fib from the 2014 bottom ATL
Targets:
bear target1: 3000-3300
bear target2: 2000
bull target: 5500 (retest of prev high)
There are also algo targets and supply zones supporting these levels.
Good Luck!
Please don't trade based only on my analysis. This is not a financial advice. Do you own research to confirm.
I'm using BLX full history with enough bars to show W1 EMA/SMA on D1
view the 2014 Bear screen or scroll the chart to the left:
Comment:
screen for reference:
Comment:
We are oversold on W1 RSI 30, this has happened only 2 times in the history of Bitcoin - in 2014 P1 and P2. So, basically it's time to buy. If there is a single moment during a year when you should buy it's this moment. The next week should be green, but there are no guarantees, of course, so, always use a stop loss with risk management.
If we are in P1 a dip to 3K is possible (RSI Bands 30 is 3570 +extra 12% wick = 3130) but I don't think we will break it this year. So, anywhere from 3000+ seems to be a good price to buy to play the next bounce up.
If we are in P2 then we could go lower to 2700 (RSI Bands 27.5 equivalent is 2717 + extra 28% wick = 2550) but volume is not high enough for the final terminal shakeout and RSI Bands curvature looks more like P1.
Also there may be no P2 in 2019, we may go straight up from here.
The exact bottom price level will depend on the determination of the individuals pushing the price down (watch the BitMex sell walls on tensorcharts)
If we are in P1 a dip to 3K is possible (RSI Bands 30 is 3570 +extra 12% wick = 3130) but I don't think we will break it this year. So, anywhere from 3000+ seems to be a good price to buy to play the next bounce up.
If we are in P2 then we could go lower to 2700 (RSI Bands 27.5 equivalent is 2717 + extra 28% wick = 2550) but volume is not high enough for the final terminal shakeout and RSI Bands curvature looks more like P1.
Also there may be no P2 in 2019, we may go straight up from here.
The exact bottom price level will depend on the determination of the individuals pushing the price down (watch the BitMex sell walls on tensorcharts)
Comment:
Seems like a good start for the bulls:
- bounced up from the bottom of the green support zone at 3480
- massive 3 hump RSI and 2 hump EWO Divergence on H4
- buy volume and candle size rising, sell volume declining, nothing major but a good start
- 700$ bounce also looking good, could be the last bounce before the final reversal at the 3K bottom
- got back above 4K, H1 EMA50 support
- EMA12x26 cross up on H4 - could signal an upwards trend change
- 4350 major sell wall on tensorcharts
- 4K is the likely target for CME futures expiration on Nov 30
- Bitcoin reversal will depend on whether we see a reversal in stock market
we could reach 4450 (pitchfork median line) or 4500 target - H1 EMA200 and 50% of prev swing a reversal/drop to 3000-3250 is still a possibility - volume levels may change, additional pressure applied by bears to fill the longs at 3200
if we fail to reach the 4450-4500 target - a deeper dive to 2750 is possible
also we're below the pitchfork's median line - implies weakness, 2900 bottom band target
- bounced up from the bottom of the green support zone at 3480
- massive 3 hump RSI and 2 hump EWO Divergence on H4
- buy volume and candle size rising, sell volume declining, nothing major but a good start
- 700$ bounce also looking good, could be the last bounce before the final reversal at the 3K bottom
- got back above 4K, H1 EMA50 support
- EMA12x26 cross up on H4 - could signal an upwards trend change
- 4350 major sell wall on tensorcharts
- 4K is the likely target for CME futures expiration on Nov 30
- Bitcoin reversal will depend on whether we see a reversal in stock market
we could reach 4450 (pitchfork median line) or 4500 target - H1 EMA200 and 50% of prev swing a reversal/drop to 3000-3250 is still a possibility - volume levels may change, additional pressure applied by bears to fill the longs at 3200
if we fail to reach the 4450-4500 target - a deeper dive to 2750 is possible
also we're below the pitchfork's median line - implies weakness, 2900 bottom band target
Comment:
Comment:
For the first time in history of Bitcoin we have closed and opened/closed on the following bar below W1 EMA200. This is a confirmed EMA200 kill with the likely next target of 3200. On balance of probabilities down seems the only way. A short fakeout spike up and a sideways market are possible while the general trend should still be down. Monthly EMA50 at 3915 is the only thing holding us. Strong assets usually don't break the monthly on the first drop.
Comment:
We have reached the target 3200 as expected