Preamble There is quite a debate as to what constitutes a bear market generally and what constitutes a bear market in crypto specifically. Having pondered this question at length for myself and experiencing the pain of indecision this is what I have developed. This determination is very important because in bull markets bullish formations overperform and even bearish formations can break upward. In bear markets bullish formations fail to trigger and bearish formations over-perform. In the linked ideas you will see that I rang a warning bell when the three day condition was met at 50k and I called the bear market at 43k and look at us now, struggling to stay above 33.5k. I have been at sundry times mocked for my call, in person and online. Meh. We see the system is now printing a bearish close on the monthly timeframe and that is going to be extraordinarily difficult to overcome.
The System The key components to this system are the VSTOP and the MTF VSTOP, which are based off the Average True range, a most valuable indicator for its use at finding lows in markets, and its use in measuring volatility for stops and the Keltner Channel. When both are flipped bearish or bullish the uptrend is extraordinarily resilient and despite viscous retracements there can be a lot more continuation potential. As they have both flipped bearish I continue to foresee a lot of bearish continuation. The monthly 20 SMA will very likely (above 90%) fall as support. Price may chop around there on the weekly chart for weeks but ultimately downside targets are going to be reached. The monthly MACD cross is almost upon us and in short order I foresee that happening as well. On lower time frames I can add the Ichimoku cloud or On Balance Volume with EMAs, but due to the high time frame those are unworkable now.
Targets I continue to think that BTC will see some wicking below the monthly Keltner channel. We may even close a candle body below it before chopping sideways and then up. Please review the linked idea for more details on that.
Final Thoughts If you are still bullish please let me know, technically, why. MY system lets me change my biases and my behavior as soon as the 3 day or weekly conditions are met. This monthly post is to help people understand the scope of that we are dealing with, and the forces that are at play. It is not possible for me to chart the 20 month wrong, or the VSTOP wrong. There is no squinting and seeing a falling wedge that isn't there or misreading divergences. The bias is bearish.
@AdrianZen, Many thanks. Unfortunately in trading the logic is almost some of the least important parts of trading for me. It is the emotional management and patience and stress that does me in.
without_worries
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There is a trend line on the monthly that appears to be offering support. Until it is broken I'm bullish.
Bitcoin is in a technical bear market - but that's when you buy. You sell in a bull market. I'm quite uncertain how it is the masses have switched those two around.
This_Guhy
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@without_worries, The masses like to be in trending markets and in general the trend is your friend until the end and The masses see consolidation as setting up continuation. if you don't know what accumulation looks like, or if you don't use high level time frames you miss long term support.
without_worries
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@This_Guhy, If statistics are anything to go by the masses overwhelmingly like to lose money. 90% and more will lose money trading these markets.
This_Guhy
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@without_worries, 90 some percent or TRADERS lose money, and that research comes from day traders, option traders and margin traders. People that don't use leverage or options usually do rather well.
without_worries
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@This_Guhy, no leverage, not a day trader, no margin - zip. Made a million and is now watching it melt away.
A handful of people that have been in touch with me over tradingview messaging, some very stressed, have lost thousands in the last 6 months. Only traded spot. I'm literally befuddled as to how so much was lost in a upward trending market. The are real folks - I'd say the most common error among then was trading too often. Many are astonished when I tell them I trade <10 per year.
This_Guhy
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@without_worries, And if they take an investing approach many of them can make it, but it is painful. One problem with crypto is almost no exchange I know of uses trailing stop losses. It really is messed up that crypto exchanges won't do that. And a lot of good traders and investors were calling the top at 60k. I heard one guy say the distribution chart looked too perfect so he disregarded it. Jim Cramer said he was out at around 55k if I recall.
Most people got euphoric. They will probably sell when it is in accumulation again.