ronfkingswanson

A Study of consolidation period bias since the November rally

MTGOX:BTCUSD   Bitcoin / U.S. Dollar
306 0 3
It can be helpful to zoom out and look at the general bias or "slant" of a consolidation phase (a period immediately following a large/steep spike or selloff. Such dramatic movements are typically followed by the market's attempt to establish the "new normal". This is often charted with the 50% retracement to find that zone of consolidation. But here I just wanted to study such periods result in new movements.

From what I'm seeing, flat (neutral) sideways consolidations, or positive (upwards slope) bias results in another rally (even if short-lived). While any negative bias is a strong sign of an impending selloff.

This is particularly relevant in the current pattern, which is being constrained tightly above and below into a straight sideways motion. Based on this analysis, such flat motion is inherently bullish .
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