Nick_Core
Long

The Bottom Is In But The Bull Market Is Not Quite Here (Soon)

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Prior to the 4k breakout I expected to range within 3k-6k if the market was truly at a bottom. Clearly we are beyond that, taking a look at the unusual strength of this rally a few conclusions can be formed.

One, the bottom is in. If you have followed me for any amount of time you know I don't make premature decisions. When your entire career, income, and livelihood is based off of your own analysis and clicking buy or sell you learn to not make drastic decisions in the name of speculation nor emotion.

Secondly, we still need to range and consolidate before a healthy lift off into space ultimately shooting past the moon to an easy landing on mars and possibly Nibiru this bull run.

The range we need is now at a higher level than my past assessments. Based on this analysis we are near the top of that range. Really nothing to fear though as this is a great opportunity for those that haven't had entry into this eminent bull market. I cover strategy towards the end of this write up.

Bump & Run Reversal

The Bump & Run Reversal has a low failure rate that is not all that common in cryptocurrency markets. It can show up as bearish or bullish , the BARR pattern for this analysis on Bitcoin is bullish , same rules apply for a bearish one.

Structure
The beginning of this lead-in phase is somewhat hard to identify due to its structure. The exact point is not all that important seeing as the pattern has played. We know that downtrend was in effect & we typically need to see anywhere from 0-45 degrees on the down slopping trend line . (Yellow line)

Starting the bump phase we need to see a decline (or incline if bearish ) of at least 60 degrees. (Orange line)

When the trend line is reached, price action sometimes hesitates for a moment. However, if the pattern is valid, you will see a breakout thru the trend which we have here.

Volume
Volume as always is the key factor here, typically you see a decline or little volume during the lead-in phase, here we have little volume activity.

During the decline entering into the bump phase there should be a severe spike in volume followed by a gradual increase inverse to the volume trend, shown here is not only a spike but more activity than we have seen throughout the entire bear market.

Coming out of the bump phase there is a rapid increase telegraphing the coming run phase.

Target
There is argument on where the actual target is for a BARR, Bulkowski (discovered by him) puts the target at the peak of the lead in phase. Some traders look for double the distance from the bump bottom to the lead-in trend line . I subscribe to Bulkowski's assessment seeing as it has more accuracy based on my observations.

Now that I have covered the overall picture of this reversal lets take dive into some other technicals to further my argument the bear market is over but the bull is not quite here.

Monthly
The highest timeframe I like to look at with Bitcoin is the monthly. Bitcoin's market is relatively new compared to traditional markets so I stick to this as my highest TF for the overall picture on momentum and strength oscillators.

Shown below is the monthly Stochastic and MACD . For the first time throughout our bear market we have clear signs of bullishness.

Secondly we show the RSI and MOM, the RSI hit past bear market levels and bounced nicely due to the BARR pattern. The momentum indicator began to accidentally telegraph the BARR pattern at 6k due to its functions, it is not something to rely on solely as it is reacting to the flat price action average prior to the BARR in comparison to the past rapid decline. However, the momentum shift is clear as day.

The GMMA (explanation can be found in my related articles above comments) gives a great indication of the trend shift and strength of this bounce.

(I urge extreme caution when comparing the past bear with this one, it is a completely different market, there is similarities to take note of and use in your analysis but overall I find that traders in this market rely on it as the word of the Satoshi without even considering the macro factors compared to the last bear)

Weekly
Looking below at the weekly Ichimoku we actually have a great indication of the markets bottom. I won't get into explaining the Ichimoku's functions as I have covered it many times on you-tube and also done an educational video on it found at my site. But to briefly summarize, Ichimoku Kinko Hyo translates into "one look equilibrium chart". Meaning when the price and components are at parity the market has found its equilibrium and can then move in the direction of demand.

As for positioning of the Ichi we have this to analyze:

  • Price trading above the Tenkan-sen: Bullish (Conversion Line in orange)
  • trading above the Kijun-sen: Bullish (Base Line in Pink)
  • trading below the Kumo: Bearish (Red cloud)
  • span A below span B: Bearish (A is the green component of the Kumo)
  • conversion line and base line below the Kumo: Bearish

So how to interpret this: The market is finding its equilibrium. As time goes on and this rally averages out the bearish trend we had. The components come together to form this equilibrium of price on Bitcoin indicating the bottom has been formed by buyers and the consensus on price is the Ichi's equilibrium. This is in early stages but the move has been visible in formation for some time, something new in this bear market indicating reversal and bottom consensus.

The weekly MACD is showing strength not seen in this bear market. The Stochastic (which is less laggy) indicates overbought conditions from the last run up. This is actually bullish in my eyes (overall picture) as it is also the first time we have had enough strength to reach that. The overbought conditions further my point of the BARR pattern as our bottom and now consolidation period within this range.

Same story with the RSI as the STOCH , first time into overbought conditions. The MOM indicates strength that has not be seen either in this bear.

Furthering my view this is our range peak my indicator Alpha: Exhaustion, which over 700 of you use at this point indicates that capital is near exhaustion, please note the indicator has functions that signal the trend reversal & capital exhaustion and those have not been painted yet.

Strategy
Too many traders focus on timing the exact bottom, yes it is exhilarating, but can be stressful for those not used to portfolio fluctuations. I am already in Bitcoin , I have never sold out all my Bitcoin , I simply open a leverage short position to protect the dollar value of my portfolio on major down swings & sell when I need to pay bills.

I realize this strategy won't fit everyone, so if I was not in my current strategy from the first time I bought Bitcoin I would be looking to buy every dip during this range period as my budget allows it. We have many percentage gains ahead of us as our last bull market took us to a whopping 12,804% rally from bottom.

Try not to be short sighted on this as there is a much bigger picture.

So, what do I mean by the title: The Bottom Is In But The Bull Market Is Not Quite Here (Soon)?

Many traders are expecting nothing but green candles forever. So it's a simple & humble reminder that markets don't work like that and need time. Yes Bitcoin moves like no other asset on earth, but I am taking a reasonable approach and assessing what I see currently on this last move: Bottom is in, but the move is tapped for the time being. Ranging in a very large and opportunistic area is the most logical move before the bull can truly start ripping and tearing.

I could be wrong on the capped point, maybe we go vertical forever, but if you take the approach of not shorting these dips and instead buying them very little can wrong. Strategy can be implemented flawlessly. Short term (weekly, monthly) fluctuations matter little in the grand scheme of Satoshi.

Remember, at this point, dips are for buying not shorting if you subscribe to this being the bottom.

The first $100 move I can remember was sometime in 2013, it was one of the most euphoric moments of my life. Then came along 2017 and we began to see $1,000 moves, one day in the near future we will get a $10,000 move in one day, hopefully by then you see the wisdom in not stressing on the exact bottom or fluctuations and just simply be grateful for being in.

It's the long game we want and need to focus on & the long game begins now.

Trade safe and lets get prepared for the ripping and tearing Bitcoin is soon to initiate.

(I am working on a an additional analysis to add this that will get into the volume on the time frames mentioned above, sometime in the next few days)
All posts are for educational purposes and are simply my views of markets conditions. Please see https://www.thetradingwizard.com/automation for access to free scripts.

Please do your own research and use my content to educate yourself.

Comments

Best analysis ever. Thank you for share Nick.
+2 Reply
Nick_Core UnknownUnicorn2138412
@pcarballeda, thank you for the kind words :)
Reply
So refreshing to read your professional encapsulating take on the Bitcoin Market.... in a sea full of "TAs" with frantic short term guesstimates and "predictions", your overview is tops... TY and please keep up the valuable work
+1 Reply
Nick_Core BlurShines
@BlurShines, Thank you very much
Reply
Hey Nick. Glad you wrote up this piece. It's been way too long since your last one. Thanks so much!
+1 Reply
Nick_Core patbeast.khoury
@patbeast.khoury, thank you
Reply
Awesome analysis. Regarding Ichimoku finding equilibrium. This is when the price and kumo, tenkan, and kijun are all "coming together" into the same area of the chart? Thanks!
+1 Reply
Nick_Core moarbtc
@moarbtc, thank you :)
Reply
Interesting, extended analysis to read. Good work.
If bitcoin goes to do that in the future(10k) moves, do you think there is a future for alts, or is there no room left?
+1 Reply
Nick_Core MartyMcFly1955
@MartyMcFly1955, absolutely, it’s all about capital flows and cycles. Alts as a whole will always be around.
Reply
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