Comparing the parabolic rallies, 2017/2019
Updated
This is the first one i looked for trying to find something to compare the rally from the past months with. Also not a perfect match, but no denying the stages we can see here. At the ATH, we can see how volume clearly dropped with that last push up. The key factor will probably waiting for the moment where selling volume becomes bigger than buying volume. On the left we can see a triangle while on the right it could be a wedge as well. I prefer to see a wedge here, also because the hype was extreme that period. So instead of making highs at similar levels (triangle), the hype was that extreme back then, that the bulls had no patience at all and just kept buying the highs. Which turned the triangle in the shape of a wedge. Hope this makes sense :)
About the volume, during the ATH it dropped clearly at the high. This time we can see this difference is not there. The volume dropped, but not significantly to easily it's a week volume rally. I also checked 5 other exchanges, most show the same thing, which is a small difference. So the volume is not worrying yet, but something to keep an eye on.
Also, that last push on the right was from 18k to 20k so around 2000 points. This time from 8000 to 8950. So both an almost similar percentage increase. This time a slightly higher, but the volume was a bit better as well.
Usually want to clearly see momentum drop at a high. Where rallies get smaller and with lower volume. The rally is smaller than the one from the 6300 and the 7200 3 weeks ago. But current rally was also almost 1000 points, which is quite significant. So when thinking that this is the high already, is a bit of guessing. But lets say, we break up from the current consolidation and we only rally 300/600 points, it would mean a (temp) high is closing in. This then usually comes in the form of a bearish wedge or an H&S.
So this fractal is not to scare anyone, just pointing out some possibilities. From my own experience and what i have seen past 18 months here on TV with crypto, most people get easily dragged into the bullish sentiment. With Bitcoin's movement showing once again how buying the highs gets rewarded with easy wins. I wish it was that easy, i just don't believe in easy money. However, i have accepted during the bull run to the ATH, that this market is unique and can easily show extremes. The past month has proven that once again. I have been looking up since the Dec low and during after the Jan low things slowly started to get clear. Since i gave the option for either an ABC correction up to 4200/4600 or the start of an impulse wave up. As you might remember, i could not say it upfront, it would have depended on how strong the breakout/rally would be. After the big rally to 5K, it became easier to expect another wave up. Where i guessed a bit that an ideal high would be around 6500. Breaking the 6K and then make a bull trap there and then go retest the 4000/5000 zone again. This would have become the ultimate test for me to see if the bear market might have ended (after a successful retest) or that we break support and continue the bear market. Posted this chart a while back, which was my road map:
As we try to do with TA as well, is calculating possible target levels. I gave a few options i could think off (based on patterns/shapes), the lowest was around 6000 and the highest around 6900. We broke this one as if it was nothing at all. Since the 6300ish broke and we rallied to the 7K, it became clear that the market was in a madness mode again where there is no room for logic. There is still some TA that can be used during times like this, but one needs to understand the difference. You can not use the same tools the same way during the past month as you do during a normal market.
As i said, do not get scared because of this chart, just to point out a possibility, that when things do go wrong, you have something to look at as a guideline. I would only start to worry a bit when we see some real top formation (like a bearish wedge or H&S), or when we see some high volume breaks of important support levels (like the 8400/8000). Any drop that stays above the 8300/8400 can still be seen as a standard correction.
Please do not forget to like if you appreciate this :)
Current Bitcoin analysis:
About the volume, during the ATH it dropped clearly at the high. This time we can see this difference is not there. The volume dropped, but not significantly to easily it's a week volume rally. I also checked 5 other exchanges, most show the same thing, which is a small difference. So the volume is not worrying yet, but something to keep an eye on.
Also, that last push on the right was from 18k to 20k so around 2000 points. This time from 8000 to 8950. So both an almost similar percentage increase. This time a slightly higher, but the volume was a bit better as well.
Usually want to clearly see momentum drop at a high. Where rallies get smaller and with lower volume. The rally is smaller than the one from the 6300 and the 7200 3 weeks ago. But current rally was also almost 1000 points, which is quite significant. So when thinking that this is the high already, is a bit of guessing. But lets say, we break up from the current consolidation and we only rally 300/600 points, it would mean a (temp) high is closing in. This then usually comes in the form of a bearish wedge or an H&S.
So this fractal is not to scare anyone, just pointing out some possibilities. From my own experience and what i have seen past 18 months here on TV with crypto, most people get easily dragged into the bullish sentiment. With Bitcoin's movement showing once again how buying the highs gets rewarded with easy wins. I wish it was that easy, i just don't believe in easy money. However, i have accepted during the bull run to the ATH, that this market is unique and can easily show extremes. The past month has proven that once again. I have been looking up since the Dec low and during after the Jan low things slowly started to get clear. Since i gave the option for either an ABC correction up to 4200/4600 or the start of an impulse wave up. As you might remember, i could not say it upfront, it would have depended on how strong the breakout/rally would be. After the big rally to 5K, it became easier to expect another wave up. Where i guessed a bit that an ideal high would be around 6500. Breaking the 6K and then make a bull trap there and then go retest the 4000/5000 zone again. This would have become the ultimate test for me to see if the bear market might have ended (after a successful retest) or that we break support and continue the bear market. Posted this chart a while back, which was my road map:
As we try to do with TA as well, is calculating possible target levels. I gave a few options i could think off (based on patterns/shapes), the lowest was around 6000 and the highest around 6900. We broke this one as if it was nothing at all. Since the 6300ish broke and we rallied to the 7K, it became clear that the market was in a madness mode again where there is no room for logic. There is still some TA that can be used during times like this, but one needs to understand the difference. You can not use the same tools the same way during the past month as you do during a normal market.
As i said, do not get scared because of this chart, just to point out a possibility, that when things do go wrong, you have something to look at as a guideline. I would only start to worry a bit when we see some real top formation (like a bearish wedge or H&S), or when we see some high volume breaks of important support levels (like the 8400/8000). Any drop that stays above the 8300/8400 can still be seen as a standard correction.
Please do not forget to like if you appreciate this :)
Current Bitcoin analysis:
Note
New Bitcoin analysis:
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