BTC Weekly Chart: Dow Jones Industrial Buy Signals for Bitcoin!
Hi all,
First smash the like + follow and I'd love to hear any feedback. I'm open to hearing other ideas as well so comment away!
Hope your weekend is going well. There has been a lot of analysis and debate in the crypto markets as to whether Bitcoin has capitulated or not. Is there more room for further downside? First my goal here was to find a proven strategy that I could back test for several decades if possible. Of course Bitcoin is only 1 decade old so I would need to revert back to equity markets.
My Goal:
-Identify a reliable trading BUY/HOLD signal
-Back test the signals +30 years
-No more than 2 indicators
-No chart patterns
*see my recent publication on chart patterns
Indicators:
-200 Week MA
-RSI
*Buy signals can only be made when the weekly candle touches or falls below the 200 WMA and RSI < 30. When looking for long term BUY/HOLD entries using the 200 WMA combined with RSI is extremely effective in locating the best entry points.
Results:
When looking at the DJI chart you can see I've highlighted three economic recessions. During these bear markets if the above strategy was followed you would have bought near the bottom for all three cycles. The Hyperwave I cycle there were two buy entry opportunities where RSI was oversold, but the price touched the 200 WMA (didn't close below). Prices continued to power forward. Hindsight 20/20 it's easy to look back and confirm those are buy entries, however, the market could have just as easily reversed into another recession based on pure technicals. So what do you do? Follow the strategy and buy.
Doing some projecting on the DJI you can see the recession of 2008 fell below the dotcom bubble. So assuming this trend continues and having no idea if we are in the middle of a Hyperwave II cycle that will go on for another 8-10 years or if we are about to collapse (lets assume the latter). In the next couple of years the DJI could fall 70% and all the way down to around 6,000 points.
What does this mean for Bitcoin right now?
-The Bitcoin market has not technically capitulated (I'm changing my mind on this from prior publications).
-If you follow the strategy there was a BUY signal on the Dec 2018 low at $3,100. Bitcoin briefly touched it's 200 WMA and RSI was oversold! Go back and look at the last time RSI got this oversold on the weekly. The last capitulation on January 2015 BTC fell 23% below its 200 WMA. It immediately bounced the following week. The current recession bitcoin has not had that "capitulation event" below the 200 WMA that we've seen so many times in the stock markets and prior Bitcoin bear markets. However, the strategy should be followed. If you have a long term outlook small buy entries could be made around current levels if you missed the Dec drop. If the market decides to go down further wait for the heavily oversold on RSI + prices below 200 WMA. Prices could drop to the top of the last bull market, which is around $1,185 level. I doubt Bitcoin goes this low, but it's Bitcoin...so who knows.
You can never buy the absolute bottom or sell the very top, but it's important for us to get interesting prices. I believe if you follow the above strategy you'll have a higher success rate at getting a competitive Bitcoin average price to HODL for the next Hyperwave growth cycle.
Best Regards,
Bobby
Don't hate the hair, hate the game.
First smash the like + follow and I'd love to hear any feedback. I'm open to hearing other ideas as well so comment away!
Hope your weekend is going well. There has been a lot of analysis and debate in the crypto markets as to whether Bitcoin has capitulated or not. Is there more room for further downside? First my goal here was to find a proven strategy that I could back test for several decades if possible. Of course Bitcoin is only 1 decade old so I would need to revert back to equity markets.
My Goal:
-Identify a reliable trading BUY/HOLD signal
-Back test the signals +30 years
-No more than 2 indicators
-No chart patterns
*see my recent publication on chart patterns
Indicators:
-200 Week MA
-RSI
*Buy signals can only be made when the weekly candle touches or falls below the 200 WMA and RSI < 30. When looking for long term BUY/HOLD entries using the 200 WMA combined with RSI is extremely effective in locating the best entry points.
Results:
When looking at the DJI chart you can see I've highlighted three economic recessions. During these bear markets if the above strategy was followed you would have bought near the bottom for all three cycles. The Hyperwave I cycle there were two buy entry opportunities where RSI was oversold, but the price touched the 200 WMA (didn't close below). Prices continued to power forward. Hindsight 20/20 it's easy to look back and confirm those are buy entries, however, the market could have just as easily reversed into another recession based on pure technicals. So what do you do? Follow the strategy and buy.
Doing some projecting on the DJI you can see the recession of 2008 fell below the dotcom bubble. So assuming this trend continues and having no idea if we are in the middle of a Hyperwave II cycle that will go on for another 8-10 years or if we are about to collapse (lets assume the latter). In the next couple of years the DJI could fall 70% and all the way down to around 6,000 points.
What does this mean for Bitcoin right now?
-The Bitcoin market has not technically capitulated (I'm changing my mind on this from prior publications).
-If you follow the strategy there was a BUY signal on the Dec 2018 low at $3,100. Bitcoin briefly touched it's 200 WMA and RSI was oversold! Go back and look at the last time RSI got this oversold on the weekly. The last capitulation on January 2015 BTC fell 23% below its 200 WMA. It immediately bounced the following week. The current recession bitcoin has not had that "capitulation event" below the 200 WMA that we've seen so many times in the stock markets and prior Bitcoin bear markets. However, the strategy should be followed. If you have a long term outlook small buy entries could be made around current levels if you missed the Dec drop. If the market decides to go down further wait for the heavily oversold on RSI + prices below 200 WMA. Prices could drop to the top of the last bull market, which is around $1,185 level. I doubt Bitcoin goes this low, but it's Bitcoin...so who knows.
You can never buy the absolute bottom or sell the very top, but it's important for us to get interesting prices. I believe if you follow the above strategy you'll have a higher success rate at getting a competitive Bitcoin average price to HODL for the next Hyperwave growth cycle.
Best Regards,
Bobby
Don't hate the hair, hate the game.
Trade active:
BTC approaching 200 WMA....if this breaks through and doesn't confirm as support watch out....could be a free fall.
Trade active:
Is the market showing signs that it's about to capitulate? the 20 EMA rolled under the 50 DMA and they are widening. showing that selling pressure is building. Just like when we broke below the 6k to 3k. Look at the highlighted boxes.
Comment:
Trade active:
bear flag developing on the 2hr with a pattern target to 3.2k.
I've marked where the 200 WMA is located at...this has to hold as the main defense for bulls.