This is a forecast using two tools I developed, one a trading strategy and the other for seasonal probabilities on a weekly and monthly basis; Wayne's Pivots Pro and Pivot Probabilities.
I'll be using these tools to do seasonal analysis on
ETHUSD
, and specifically how it has reacted in prior years in the 52nd week of the year. While seasonality analysis is limited, as in there's only 7 years of data, it is not totally impossible to come away with some useful facts about how
ETHUSD
has behaved during the 52nd week over those 7 years. Nonetheless, the more data in years you have, the more accurate these historical probabilities theoretically become.
TD;DR: Historically, ETHUSD has remained range bound between the weekly R1 and S1 pivot in the 52nd week of the year.
Breakdown: From Left to Right
Closing probabilities (left chart) measure the number of times we have historically closed the period, 52nd week, between any two pivots.
We have only closed outside of the weekly R1 to S1 in the 52nd week of the year one time in the last 7 years. This encourages a range bound trade as well, with 85.71% of historical closes between R1 ($4228.23) and S1 ($3826.74).
The orange dotted line shows the weighted-sum-mean, using the probabilities as weights against the pivot points to calculate a mean. The weighted mean of closes is at a price of $4086.91, and it is biased above the central pivot as 71.43% of closes are also above the central pivot.
(The green and red numbers above R3 and below S3 summarize the total number of probabilities above and below the central pivot.)
High probabilities (middle chart) measures the number of times we get a historical high, or top out, between any two pivots.
We see 42.86% of historical highs for the 52nd week of the year were above the M4 pivot, at $4310.46 right now; that means it's also true that 57.14% of highs were below M4 ($4310.46) historically. While not quite the odds of a coinflip, 57% above M4 to 43% below M4; because we're working with such a low sample size, we might want to interpret these odds effectively as a 50/50 coinflip.
Low probabilities (right chart) measures the number of times we get a historical low, or bottom out, between any two pivots.
Most lows occur above S1 this week which is positive for dip buyers. Historically, 71.43% of lows were above S1, and with the weighted mean low priced at $3857. It's reasonable to say it's unlikely based on historical probabilities we go below S1 at $3826.74 this week.
Again, however, because of such a low sample size it's never worth putting everything on the line for such a trade. A lower sample size should give you less confidence and more uncertainty about the true seasonal probabilities an asset has. While we can state the current facts with 7 years of data on ETH, there is always more to take into account before pulling the trigger.
I'll be using these tools to do seasonal analysis on
ETHUSD
, and specifically how it has reacted in prior years in the 52nd week of the year. While seasonality analysis is limited, as in there's only 7 years of data, it is not totally impossible to come away with some useful facts about how
ETHUSD
has behaved during the 52nd week over those 7 years. Nonetheless, the more data in years you have, the more accurate these historical probabilities theoretically become. TD;DR: Historically, ETHUSD has remained range bound between the weekly R1 and S1 pivot in the 52nd week of the year.
Breakdown: From Left to Right
Closing probabilities (left chart) measure the number of times we have historically closed the period, 52nd week, between any two pivots.
We have only closed outside of the weekly R1 to S1 in the 52nd week of the year one time in the last 7 years. This encourages a range bound trade as well, with 85.71% of historical closes between R1 ($4228.23) and S1 ($3826.74).
The orange dotted line shows the weighted-sum-mean, using the probabilities as weights against the pivot points to calculate a mean. The weighted mean of closes is at a price of $4086.91, and it is biased above the central pivot as 71.43% of closes are also above the central pivot.
(The green and red numbers above R3 and below S3 summarize the total number of probabilities above and below the central pivot.)
High probabilities (middle chart) measures the number of times we get a historical high, or top out, between any two pivots.
We see 42.86% of historical highs for the 52nd week of the year were above the M4 pivot, at $4310.46 right now; that means it's also true that 57.14% of highs were below M4 ($4310.46) historically. While not quite the odds of a coinflip, 57% above M4 to 43% below M4; because we're working with such a low sample size, we might want to interpret these odds effectively as a 50/50 coinflip.
Low probabilities (right chart) measures the number of times we get a historical low, or bottom out, between any two pivots.
Most lows occur above S1 this week which is positive for dip buyers. Historically, 71.43% of lows were above S1, and with the weighted mean low priced at $3857. It's reasonable to say it's unlikely based on historical probabilities we go below S1 at $3826.74 this week.
Again, however, because of such a low sample size it's never worth putting everything on the line for such a trade. A lower sample size should give you less confidence and more uncertainty about the true seasonal probabilities an asset has. While we can state the current facts with 7 years of data on ETH, there is always more to take into account before pulling the trigger.
Comment:
We have reached the lower end of the range at S1, where we have ~85% historical probability of staying above the M1 pivot at $3708. Upside is not amazing, but the closing probabilities give way for a decent probability, 71.43%, of going above the weekly central pivot.
Joe Baus, bausbenchmarks.com
