This analysis brings to center stage Bitcoin and the asset mostly linked with, Gold. On this chart, Bitcoin (the digital Gold) shows a quite similar behavioral pattern with Gold's bottom period of the 80s/ 90s bear cycle.
What stands out is this identical +33.50% bounce on Gold and the subsequent Double Top followed by a slow decline before the major lift off. Bitcoin is issuing the very same pattern meaning that market/ investor psychology is identical on this stage of its cycle.
This is a cyclical buy signal for Bitcoin.
Two important elements to point out here.
First, the different time frames (BTC on 1D/ Gold on 1W). This shouldn't affect the conclusions derived as Bitcoin's life span is far shorter than Gold which has been used as a store of value for centuries. Moreover Bitcoin has been moving at a much faster pace since its invention, so the market psychology, dynamics etc have adapted to a much shorter time frame.
Second, Gold strong lift-off was backed by the launch of its ETF in 2003. We may not be far away from a similar situation on Bitcoin.
We see first hand how the market bias are very interlinked. Gold gave investors many buy signals throughout that bear cycle, just as Bitcoin is currently giving. Investors who failed to buy Gold's buy signals during the late 90s have missed a great opportunity.
Would you ignore the very same buy signals on Bitcoin? Your opinion and comments on this are more than welcome.
Nothing even close.
BTC only lower highs.
Gold higher high which is a first signal of a trend change.
TradingShot
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I have no problem with conflicting opinions, I rather welcome them. But I would love to see a chart, especially on Gold that breaks the multi year 1370 resistance that is currently closing in.
Alexander_Nikitin
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A pattern is something regularly repeated. A statistically reliable pattern is something that is regularly repeated in a large numer (at least 1000) of tests. You notice a formation that worked to the upside on Gold but there's absolutely no statistical probability (at least neither you nor me know this probability - that's why the outcome is random for us) of the same formation to work to the upside.
svhill11
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@Alexander_Nikitin, Well at least you stated something factual there. Statistical probabilities: In a young market such as crypto there ARE NONE. We have been around 10 years and you need at least 3 samples of something to show a trend. We have not even emerged from 3 bear markets (in the 3rd now). Yet all these experts say the charts in 2014-2015 show where we go. It is nothing more than random similarity under well established rules.
As such, this chart comparing gold at least goes into an asset with a bit more of a track record. Overall the charts are similar. The gold chart does show more trend reversal heading into the move upward however (higher highs higher lows) but those can be found if you go to the daily charts...regardless it is all random at this point in this market. Even those saying we do not moon for another year. They have no clue. No confirmation for or against that yet.
MrRenev
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@svhill11, "We cannot use patterns that repeated thousands of times to confirm anything because Bitcoin is new, therefore we should use something tht doesn't even look similar and happened once."
10/10 logic would recommend.
@Alexander_Nikitin, Thank you for at least expressing a solid counter argument here Alex. I appreciate as you are probably the only one that did so on this comment section and I am not being ironic at all. That is the true essence of this platform. To exchange different views and benefit from them.
BTC only lower highs.
Gold higher high which is a first signal of a trend change.