BTC Bull Run turning into Bear Trend (Death Cross), or what if?
End of bull trend?
These last few days we see more and more people talking about the upcoming Death Cross on the Daily BTC chart and the "2019 fractal" as you can see here below:
A Death Cross indicating the end of a strong bull trend. In turn the start of consolidation/correction or even a longer lasting bear trend. Following the explanation of a Death Cross (Golden Cross) on Investopedia these are the most important takeaways:
- A golden cross suggests a long-term bull market going forward, while a death cross suggests a long-term bear market.
- Either crossover is considered more significant when accompanied by high trading volume.
- Once the crossover occurs, the long-term moving average is considered a major support level (in the case of the golden cross) or resistance level (in the instance of the death cross) for the market from that point forward.
- Either cross may occur as a signal of a trend change, but they more frequently occur as a strong confirmation of a change in trend that has already taken place.
BUT, what if...?
I'd like to add another interesting fractal to the discussion. The 2020 August-September fractal. NOTE: different timeframes.
First of all the top consolidation of the price is pretty similar to the price action we saw the last four months for BTC on the daily chart. Additionally the RSI shows similar movement and levels at several moments in time when comparing both.
The only thing which differs is the run up to the top price levels which is pretty steep in 2020 compared to Feb 2021.
Then considering the Death Cross situation. (Im using EMAs here) We must admit the higher the timeframe the more significant a situation is. To get the best comparison we found the 8H TF reflects the current situation in the best way.
Price dropped and started to consolidate. For the first time now price made a local higher high and right at that point the cross is about to happen.
Where will this lead to?
So now lets look what happened in 2020 (as we all know of course) and lets project that to the current situation in order to follow the potential continuation of the fractal.
First if we follow the price action it will look something like drawn by the yellow brushed line. It might not follow it that strict but sideways choppiness is definitely very much possible until the end of the summer. Also the pullback to 49K~ish aligns with the 0.618 fib pullback level of the latest drop.
Second following the EMAs, which did cross several times, price bouncing around it but no bear trend started there.
Finally, if we look into the future where would the target of the fractal end?
- Following the increase in price of 53K, BTC would get to around 93K.
- Following the increase in percentage of 497%, BTC would get to around 240K.
No guarantee whatsoever of course. The main thing I wanted to show here is that if and once we do a pullback of the downward move up to 49K, even if we get rejected again and drop down to current price levels, the market still doesn't have to be in a multi year bear trend yet.
—————
Do Your Own Research (of course)
Trade at own risk (of course)
Only trade what you can afford to lose (of course)
These last few days we see more and more people talking about the upcoming Death Cross on the Daily BTC chart and the "2019 fractal" as you can see here below:
A Death Cross indicating the end of a strong bull trend. In turn the start of consolidation/correction or even a longer lasting bear trend. Following the explanation of a Death Cross (Golden Cross) on Investopedia these are the most important takeaways:
- A golden cross suggests a long-term bull market going forward, while a death cross suggests a long-term bear market.
- Either crossover is considered more significant when accompanied by high trading volume.
- Once the crossover occurs, the long-term moving average is considered a major support level (in the case of the golden cross) or resistance level (in the instance of the death cross) for the market from that point forward.
- Either cross may occur as a signal of a trend change, but they more frequently occur as a strong confirmation of a change in trend that has already taken place.
BUT, what if...?
I'd like to add another interesting fractal to the discussion. The 2020 August-September fractal. NOTE: different timeframes.
First of all the top consolidation of the price is pretty similar to the price action we saw the last four months for BTC on the daily chart. Additionally the RSI shows similar movement and levels at several moments in time when comparing both.
The only thing which differs is the run up to the top price levels which is pretty steep in 2020 compared to Feb 2021.
Then considering the Death Cross situation. (Im using EMAs here) We must admit the higher the timeframe the more significant a situation is. To get the best comparison we found the 8H TF reflects the current situation in the best way.
Price dropped and started to consolidate. For the first time now price made a local higher high and right at that point the cross is about to happen.
Where will this lead to?
So now lets look what happened in 2020 (as we all know of course) and lets project that to the current situation in order to follow the potential continuation of the fractal.
First if we follow the price action it will look something like drawn by the yellow brushed line. It might not follow it that strict but sideways choppiness is definitely very much possible until the end of the summer. Also the pullback to 49K~ish aligns with the 0.618 fib pullback level of the latest drop.
Second following the EMAs, which did cross several times, price bouncing around it but no bear trend started there.
Finally, if we look into the future where would the target of the fractal end?
- Following the increase in price of 53K, BTC would get to around 93K.
- Following the increase in percentage of 497%, BTC would get to around 240K.
No guarantee whatsoever of course. The main thing I wanted to show here is that if and once we do a pullback of the downward move up to 49K, even if we get rejected again and drop down to current price levels, the market still doesn't have to be in a multi year bear trend yet.
—————
Do Your Own Research (of course)
Trade at own risk (of course)
Only trade what you can afford to lose (of course)
1. In the history so far it has never happened before that the bull run continued after a Death Cross happened.
2. Keep in mind: A Death Cross isn't a Death Cross as long as it hasn't crossed... Which it did not yet...