Empirical Approach to Past Bearmarkets And The Current Situation

23 mars 2020

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Hello traders investors and community, today I look empirically on the bear markets bitcoin suffered in the past and an important signal which we saw in the bear markets and which is repeating right now, the last weeks were highly volatile and the coronavirus shocked the whole markets up, not just the cryptocurrency market-landscape, also all-important index and stock markets.
However, I am expecting a cool down the next days and weeks from the fears as the economic-structure is recovering from the panic on the markets, that's why we can expect some moves to the upside, but that doesn't mean bitcoin is completely out of the woods, we have strong and serious resistance above us!
I recommend to you that you read the whole analysis to have a complete outlook on the situations:
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We have a strong resistance above us and there is this devastating thunder cloud suite signal which provided the final change in direction in the past bear markets, I already did an analysis on this some time ago as I pointed out it now turned to the downside, you can see it in the chart:

In this analysis, my point was to show how the market could turn bearish when the weekly close closes below the thunder cloud suite, which it already did in past events turning from bullish to bearish. As you can see it in the chart marked with the red cycle it signaled originally the bear markets of 2014 and 2018.

Please look also at this major important trend-line which has its origins at the very beginnings of the bitcoin eras, this trend-line is so devastatingly important that in the bullish scenario it has to be secured from breaking down-side. The point now is that when bitcoin doesn't manage to stabilize above this trend-line it will give another bearish signal for bearish continuation. What is also important in this structure is the 100-EMA and the 200-EMA which also supported the last two confirmed bear-markets with a first confirmation below the 200-EMA before moving below the 100-EMA. When we break the 100-EMA down this will be devastatingly difficult.

As the Thunder Cloud Suite Signal is already a heavy-handed important fact which shouldn't be ignored! Because it was so reliable in the past this could also be the next time now. Please look also at the consolidation phase happened after the second signal provided the second bear-market in 2018, there was a looong consolidation-phase before finally going down, this could also be the case now, creating a longer consolidation phase between the black-trend-line, the 100 EMA, the 200 EMA and below the thunder cloud suite which already closed weekly in the bearish zone.

So we have some important bearish signals that we have to consider now as reasonable, but as I already pointed out in my recent analysis bitcoin is in an overall consolidation phase which hasn't already ended, there is the possibility given that the Thunder-Cloud-Suite-Signal is actually a fake-out and that it turns bullish after the consolidation-phase has confirmed, but for now, this is not the most reliable scenario to depend on:

The next days and weeks we can expect bitcoin to remain in the consolidation channel as mentioned in my analysis, but there is plenty of resistance above us and with this information given we can say that when bitcoin starts to approach higher it will have a difficult time to do that, for that reason I consider the bearish scenario after the consolidation phase has finally ended as highly possible but that can turn when we take out these massive resistance levels above us and close above the red falling dotted trend-line you can see in the chart above the current price action.

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In this manner: "The grand aim of all science is to cover the greatest number of empirical facts by logical deduction from the smallest number of hypotheses or axioms."

Have a good day and starting in the weeks! Wish you all luck, happiness and of course good trading profit! ;)

Information provided is only educational and should not be used to take action in the markets.
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14 févr.

Note

ANALYSIS UPDATE: BITCOIN continued with the emerging bullish volume that increased throughout the 100- and 200-EMA.

Since BITCOIN moved on with the expected determinations it had the ability to finally bounced above the trendline and emerge with the major price move.