This chart shows BTC/USD price with weekly candles, 20MA, and RSI . Looking at this comparison between the end of the 2015 bear market and the current year's bear market, we can see some undeniable similarities.
In 2015, the charts continually showed lower highs and lower lows (shown in red), but eventually hit the lowest low. However, we then started to see what seemed to be a higher low (shown in yellow), and a break of the 20MA (1st pink circle), which was a bullish sign. This bull run broke above the previous high, setting higher highs for the first time since the previous bull market (green arrow). This then proved to be a bull trap, as the price plummeted below the 20MA again (2nd pink circle), and on towards the lowest low, forming a double bottom . However, this low recovered quickly, breaking above the 20MA again (3rd pink circle), and indicating the start of a new bull market.
Comparing this to the recent trends, we can see similar behavior up until the break above the weekly 20MA and huge bull push that has everyone thinking the bear market has come to an end. However, this recent behavior would put us at the first higher high (green arrow), meaning a big drop is still on the way. I took the candles from 2015's first lower low and overlayed them in blue so you can get an idea of how things might turn out. We can also take a look at RSI and see what behavior marked the start of the previous bull market. We can see that there is a zone of resistance that was broken (marked by long blue rectangle ), and that it then acted as a support during the entirety of the bull market. As you can see, we still haven't broken this zone of resistance, and our current trend looks a lot like when it was tested near the end of the 2015 bear market. If history repeats itself, we will fail this test, fall back, and break through this zone on the next test, which I'm guessing will occur roughly somewhere between August and November of 2019. After this, we should see the start of a new bull market and be on our way to the moon. Either way, stay on the look for another break below the 20MA and keep your stop losses tight.
Good luck,
magoog11
In 2015, the charts continually showed lower highs and lower lows (shown in red), but eventually hit the lowest low. However, we then started to see what seemed to be a higher low (shown in yellow), and a break of the 20MA (1st pink circle), which was a bullish sign. This bull run broke above the previous high, setting higher highs for the first time since the previous bull market (green arrow). This then proved to be a bull trap, as the price plummeted below the 20MA again (2nd pink circle), and on towards the lowest low, forming a double bottom . However, this low recovered quickly, breaking above the 20MA again (3rd pink circle), and indicating the start of a new bull market.
Comparing this to the recent trends, we can see similar behavior up until the break above the weekly 20MA and huge bull push that has everyone thinking the bear market has come to an end. However, this recent behavior would put us at the first higher high (green arrow), meaning a big drop is still on the way. I took the candles from 2015's first lower low and overlayed them in blue so you can get an idea of how things might turn out. We can also take a look at RSI and see what behavior marked the start of the previous bull market. We can see that there is a zone of resistance that was broken (marked by long blue rectangle ), and that it then acted as a support during the entirety of the bull market. As you can see, we still haven't broken this zone of resistance, and our current trend looks a lot like when it was tested near the end of the 2015 bear market. If history repeats itself, we will fail this test, fall back, and break through this zone on the next test, which I'm guessing will occur roughly somewhere between August and November of 2019. After this, we should see the start of a new bull market and be on our way to the moon. Either way, stay on the look for another break below the 20MA and keep your stop losses tight.
Good luck,
magoog11
Comment:
I just wanted to add that I don't actually think this scenario will play out exactly the same. As others have said, a double bottom doesn't seem very feasible in our current state. I think we'll have retracement down to 4k or maybe even lower, but anything lower than that will probably just be brief wicks. We still have a correction coming our way, but this low will be a higher low than the previous.