Crypto Analysis | This Cycle is Different
Good day Hiveians!
Join me in analyzing the crypto markets!
Since the bear continued last week, it's time for more analysis
One argument I made in summer of this year was that I claimed the bear market might have ended in July of 2022. Now we know this is not the case with a newer low. I also alluded to this scenario here of which I will repost the chart of back then:
Drawing a line from the past bottoms seems to be a pretty good indicator for when the bottom is in for the next cycle. But with this cycle it is ambiguous: we can draw several lines depending on the scale we look at. This line at the bottom to the right is the result of drawing the lows on the weekly chart. But as you can see there are some lower wicks which would point to crazy lows (sub 7k). Because of this I think we should stay with the weekly close which exactly predicted the current lows.
There are some other indicators which sets this cycle apart from the previous ones. There is a trend line going back over 10 years of which the price has so far always stayed above. But with this month it seems we will close below it. Price would have to rally back to 20.6k for this only to be a wick and have a monthly close above the line. This seems currently very unlikely (although there are still about 2 weeks left).
If so, this long lasting trend line would be definitively broken, setting this cycle apart from previous ones.
And then of course there is perhaps the most obvious difference. Price for this cycle went below the ATH of the previous one.
This also has never happened before.
Then there is the usual correction amount of ~83%. Currently we are still above that, and it is because of this that many people have called for 12k BTC. It would be exactly 83%.
The RSI is now at the lowest level ever observed. Whereas previously the RSI bottomed out at around 43, it is now already at close to 40. One can also see that this has lasted for quite some time. But the silver lining is that it seems to be bottoming out.
How long have the bear market generally lasted? If we define the bear as the continuation of a falling price until the bottom, then it has lasted 406 days for 2014, 371 for 2018 and currently we are sitting at 378 days.
All of these indicators show that this cycle is quite different to the previous ones. But they also seem to suggest that the bear market could soon come to a close. My guess would be around the turn of the year. But then again, maybe this time will be different...
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
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