BITCOIN Comparing 2 year corrections. Conditions for a bottom.

Bitcoin (BTCUSD) has seemingly recovered from the correction of the first 2 weeks of May and is trading +20% higher from the May 12 Low. However the question remains, can this recovery be sustained or the bottom isn't yet in? A comparison with the corrections of 2020 and 2018 can help us draw meaningful conclusions.

Let's see the similarities and differences between the 2020 and 2018 corrections.


** 2020 vs 2018 **
Similarities: Both confirmed their recovery and started a new uptrend when the price broke above the Lower Highs trend-line form the last Top. That roughly matched the 1D MA50 (blue trend-line).

Differences: While the 1D RSI broke well below the 30.000 oversold level in both cases, in 2020 it achieved a price bottom for BTC, while in 2018, a price Lower Low was made for the bottom despite the fact that the RSI was rising.
That bottom was made exactly on the 1W MA200 (red trend-line), while in 2020 the price dropped considerably below the 1W MA200.


** Today **
The correction since late March resembles so far that of 2018 in terms of the 1D MA50 and 1D MA200 (orange trend-line) and in terms of the total drop percentage as so far it has completed a -47%, not far off the 2018 -52%. A -52% would be approximately around $23150, just over the 1W MA200, which in 2018 formed the bottom.

However it terms of RSI, it resembles more the 2020 correction, as the RSI is rising along with the price.

So where does this leave us in terms of speculation? The common parameter in those past corrections, is that the market confirmed a sustainable rise when the price broke above the Lower Highs trend-line, which is also roughly where the 1D MA50 was. Right now the 1D MA50 is at $38623 but dropping fast due to May's aggressive correction. Long-term traders and investors have much better chances buying once BTC breaks above this trend-line. Our thesis is that, we will most likely see sideways price action before the Lower Highs/ 1D MA50 break, meaning that we may see a 2 month consolidation. Can this be this Bear Cycle's Accumulation Phase?

Feel free to share your work and let me know in the comments section below!



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