BITCOIN closed 1st green month after 3straight red! Buy or sell?

1 mars 2022

So Bitcoin closed yesterday its 1st green month after a series of 3 red monthly closings since the November All Time High (ATH). Is this bullish or bearish on the long-term? One way to answer this is to see how the price moved after a similar monthly pattern.

This chart is obviously on the 1M time-frame with the blue trend-line being the 1M MA50 but with the red being the MA50on a different time-frame, the 1W. To have a larger sample, I've included the cases where a green 1M candle appeared after 3 or more straight red. Other than the current, these parameters return 7 other such patterns:

* The most recent being the July 2021 1M green candle, which formed after 3 straight red. The price made a new High after that with the 1W MA50 supporting.
* The October 2019 1M green candle was also formed after 3 straight red. The price made a new Low after that as the 1W MA50 failed to support.
* The February 2019 1M green candle was formed after 6 straight red. This was slightly after the bottom of the 2019 Bear Cycle and the price made a new High, effectively kickstarting the start of the new Bull Cycle with the 1M MA50 (blue trend-line) supporting.
* The June 2015 1M green candle was formed after 3 straight red. This was also slightly after the bottom of the 2014/15 Bear Cycle and the price made a new High, effectively kickstarting next Bull Cycle with the 1M MA50 (blue trend-line) supporting.
* The November 2014 1M green candle was formed after 4 straight red. The price made a new Low after that as it failed to break above the 1W MA50.
* The May 2014 1M green candle was formed after 3 straight red. The price made a new Low after that as the 1W MA50 failed to support.
* Finally, the December 2011 1M green candle was formed after 5 straight red. This was slightly after the bottom of the 2011 Bear Cycle and the price made a new High, effectively kickstarting the start of the new Bull Cycle, which came after BTC broke above the 1W MA50. Check this series on the snapshot below, if you don't want to scroll the main chart to the left:



So as you can calculate based on the sample above, historically when a green 1M candle has formed after 3 or more straight red, BTCUSD moved on to a new High more times (4) than a new Low (3). The key here seems to be the 1W MA50 (red trend-line), which every time it broke to the upside after such a pattern, it always delivered a new High (3 times) relative to when the red streak started. Basically all of those 3 times it did, Bitcoin had just priced the bottom of a Bear Cycle and was at the start of a Bull Cycle. I've included the 1M RSI indicator on this chart to show that, based on this, with it being on Lower Highs and currently below its (RSI based) MA (yellow trend-line), the price action since the April 2021 High looks more like a Bear Cycle. That is a subject I've touched in more detail in previous analyses of mine, one of which you can find below.

So how do you think BTC will trade following this 1st green monthly candle after 3 straight red? Is this buy or sell signal? Feel free to share your work and let me know in the comments section below!

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