The "TBO" Indicator (we have to type it in quotations because TBO is a ticker here on TradingView) stands for Trending Breakout Indicator, and it does two things exceptionally well: gauge the strength of the trend, and identify when a breakout (or breakdown) could happen. No indicator (just like any trader) will be 100% accurate every time, but based on past performance, we can see that the "TBO" has accurately predicted price breakouts for Ethereum 7 out of 10 times. These breakouts have resulted in moves ranging from 50% to over 500%, so you can understand why we are interested in the current price action showing two "TBO" Breakouts in the last three days.
Before we get all giddy and excited about the possibility of a bullish breakout for ETH, let's look at the last 3 times the "TBO" Breakouts failed.
Failure #1: June 2016. ETH had already made a major move from ~$1 up to $13 in early 2016. The "TBO" Breakout we're focusing on had a good structure (price above the cloud, three "TBO" Breakouts in a row, all "TBO" lines in the cloud pointing up). There must have been some FUD at the time to drop the price -52% over 2 days, and I don't know what it could have been.
Failure #2 and #3: both of these happened right next to each other in 2021. Both of these happened after a huge run starting back in December 2020.
So why did these fail? Our guess is because these "TBO" Breakouts were printed after substantial moves over 700%, both in 2016 and in 2020 (funny how those are 4 years apart...). While not every "TBO" Breakout resulted in several hundred percent moves, each successful breakout seems to have appeared after the completion of a bear market lasting about a year. So when we step back and look at the current conditions, it would seem that this is our first "TBO" Breakout after coming out of a significant bear market. For this reason we are long on Ethereum- even if for a move of only 50% or so.
What would change our mind is if the price of ETH made a sudden drop greater than 30%, which has happened in the previous failed "TBO" Breakouts mentioned above.
Before we get all giddy and excited about the possibility of a bullish breakout for ETH, let's look at the last 3 times the "TBO" Breakouts failed.
Failure #1: June 2016. ETH had already made a major move from ~$1 up to $13 in early 2016. The "TBO" Breakout we're focusing on had a good structure (price above the cloud, three "TBO" Breakouts in a row, all "TBO" lines in the cloud pointing up). There must have been some FUD at the time to drop the price -52% over 2 days, and I don't know what it could have been.
Failure #2 and #3: both of these happened right next to each other in 2021. Both of these happened after a huge run starting back in December 2020.
So why did these fail? Our guess is because these "TBO" Breakouts were printed after substantial moves over 700%, both in 2016 and in 2020 (funny how those are 4 years apart...). While not every "TBO" Breakout resulted in several hundred percent moves, each successful breakout seems to have appeared after the completion of a bear market lasting about a year. So when we step back and look at the current conditions, it would seem that this is our first "TBO" Breakout after coming out of a significant bear market. For this reason we are long on Ethereum- even if for a move of only 50% or so.
What would change our mind is if the price of ETH made a sudden drop greater than 30%, which has happened in the previous failed "TBO" Breakouts mentioned above.
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