BTC market cycles...Anger or Depression Stage 4?
Updated
Look up that infamous "Wall Street Cheat Sheet, psychology of a market cycle" diagram
The 4th stage is the markdown and downtrend. In the very first cycle it looks pretty textbook where stage 1 is a consolidation box but crypto does crypto things...by the time COVID came the stage 4 into stage 1 is a WIDE and volatile type of consolidation which lead to the 2nd markup to ATHs.
This year we have inflation, another macro event! Stage 4 into a theoretical stage 1 could end up doing the same, it's definitely not clear cut or this stage extends further down first before a basing type of consolidation. But...the clue is to watch the 40 ma cross/rejection and what happens on this broadening pattern. A clear cross on the ma and pattern break could signal a new stage 1 (can have intermediate steps) in which a new set of unpredictable and volatile patterns form!
Btw this is speculative. I could redraw this as well and this could very well still be gigantic top on stage 3 (like cycle 1 pattern breakdown, this entire top here could also be a larger broadening pattern with a failed breakout) But I am looking at it in terms of smaller cycles and patterns but I will keep updating this analysis on it.
*** currently ***
1. bear flag
2. 3rd touch on broadening support bounce
3. price moving towards the 40ma
4. will it swing up to test resistance?
5. what/when/if will the next stage 1 base look like?
6. the last cycle just take notice the wide and sideways 1a/1b I pointed out.
7. last cycle lasted 700d, I duplicated that period of time to current cycle.
What if it repeats and it lines up right to where the bear flag could hit (channel upwards) the resistance?
8. the 40 ma cross/reject will be something interesting to watch.
...past performance is not indicative of future results...but sure lines up nice!
The 4th stage is the markdown and downtrend. In the very first cycle it looks pretty textbook where stage 1 is a consolidation box but crypto does crypto things...by the time COVID came the stage 4 into stage 1 is a WIDE and volatile type of consolidation which lead to the 2nd markup to ATHs.
This year we have inflation, another macro event! Stage 4 into a theoretical stage 1 could end up doing the same, it's definitely not clear cut or this stage extends further down first before a basing type of consolidation. But...the clue is to watch the 40 ma cross/rejection and what happens on this broadening pattern. A clear cross on the ma and pattern break could signal a new stage 1 (can have intermediate steps) in which a new set of unpredictable and volatile patterns form!
Btw this is speculative. I could redraw this as well and this could very well still be gigantic top on stage 3 (like cycle 1 pattern breakdown, this entire top here could also be a larger broadening pattern with a failed breakout) But I am looking at it in terms of smaller cycles and patterns but I will keep updating this analysis on it.
*** currently ***
1. bear flag
2. 3rd touch on broadening support bounce
3. price moving towards the 40ma
4. will it swing up to test resistance?
5. what/when/if will the next stage 1 base look like?
6. the last cycle just take notice the wide and sideways 1a/1b I pointed out.
7. last cycle lasted 700d, I duplicated that period of time to current cycle.
What if it repeats and it lines up right to where the bear flag could hit (channel upwards) the resistance?
8. the 40 ma cross/reject will be something interesting to watch.
...past performance is not indicative of future results...but sure lines up nice!
Note
BTC update - never quite made it to the 40MA but rather continued the bear wedge. Nothing we didn't know already but the big potential flip of the 40MA was invalidated. Few scenarios if continued downside - 1st target 17.5 and measured move 14.4. If broadening support breaks, previous widening at 10.5. Using a 3D here so there's a wide 3 day demand spanning 16.2-18.7 formed in 2020 to watch. As always the watch is a higher low, double bottom or lower low before you can make any further analysis on the downside. The current candle looks like a pause, inside candle, inverted hammer setting up for a 3 bar move. Upside for retrace, downside for continuation towards demand. Note
Sitting just outside of the pennant. Stoch higher low + cross printed. Momentum is there but needs to follow through. Still under 40MA. 4HR Chart Note
Losing daily demand zone with pennant false break and breakdown. Next demand19.3K below if it doesn't back test or reclaim this current zone.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.