Weekly close below 55WMA spells -50% or worse drop for Bitcoin
BTC has printed a full candle body below the 55 week EMA.
Previous dates this has happened following a bull phase leading into bear markets --->
Nov 25 2019 (-48% drop, 105 day fall before bottom)
Apr 2 2018 (-55% drop, 252 day fall before bottom )
Sep 1 2014 (-65% drop, 133 day fall before bottom)
The data averages to an expected 56% drop from here but with Bitcoin's growing maturity and falling volatility we could expect this drop to stick closer to 40%. However, the 56% average drop would put us eerily close to a retest of our previous cycles ATH of $20k.
Previous dates this has happened following a bull phase leading into bear markets --->
Nov 25 2019 (-48% drop, 105 day fall before bottom)
Apr 2 2018 (-55% drop, 252 day fall before bottom )
Sep 1 2014 (-65% drop, 133 day fall before bottom)
The data averages to an expected 56% drop from here but with Bitcoin's growing maturity and falling volatility we could expect this drop to stick closer to 40%. However, the 56% average drop would put us eerily close to a retest of our previous cycles ATH of $20k.
Comment:
I meant to add I am a macro bull and do believe in lengthening cycles BUT until I see BTC reclaim the top of the ema ribbon (ESPECIALLY the 55 week band) I will remain short term bearish and expecting this drop to play out.
Comment:
It has now been almost a year since I posted this idea and it has played out as expected.
Pulling from the $43k level (roughly where the weekly candle printed below the 55 Week EMA) we have surpassed our expected 56% drop and have experienced a 64% correction all the way down to the $15.5k level which nearly matches the largest drawdown from a full candle body printing below the 55 week EMA in Bitcoin's history.
From a timeframe perspective we are 315 days from the candle close putting us well beyond the time it took to reach bottom the previous 3 times this type of candle printed.
Given the size of the drop and the amount of time that has passed it is possible to assume we may have bottomed (especially with the entire market sentiment currently being that we now have to go further down to $14k/$9k/$7k or lower) but I currently remain on the sidelines until there is further bottom confirmation, starting with a candle close above the 20 week EMA.
Pulling from the $43k level (roughly where the weekly candle printed below the 55 Week EMA) we have surpassed our expected 56% drop and have experienced a 64% correction all the way down to the $15.5k level which nearly matches the largest drawdown from a full candle body printing below the 55 week EMA in Bitcoin's history.
From a timeframe perspective we are 315 days from the candle close putting us well beyond the time it took to reach bottom the previous 3 times this type of candle printed.
Given the size of the drop and the amount of time that has passed it is possible to assume we may have bottomed (especially with the entire market sentiment currently being that we now have to go further down to $14k/$9k/$7k or lower) but I currently remain on the sidelines until there is further bottom confirmation, starting with a candle close above the 20 week EMA.