Bitcoin - Cyclical Measurements
Updated
Oh another post predicting the market top for bitcoin... No, this idea is far from it, today I'd like to present the facts surrounding the technical aspect of bitcoin to help provide a better understanding of the asset.
Please read the full post to gain a better understanding of what I'm looking at.
Today I'm analysing the weekly chart on BTC/USD.
As mentioned I'm using a logarithmic scale which presents prices in the proportional amount of percentage increase or decrease, providing us a fair representation of where bitcoin was, is and could be.
I've broken down each cycle measured from the breakout of an all time high to a new all time high being the market top.
Also detailing the percentage increase upon achieving targets at $20,000, $50,000 and $100,000 as there seems to be a lot of financial articles relating to these figures as the predicted long term value of the asset.
This month will be interested as CME and CBOE -0.29% launch bitcoin futures .
Below I have detailed the increase throughout each phase of the market from low to high on the weekly chart.
The median trendline seems to be acting as a support and resistance level as price returns to it over time, I would pay attention to this going forward.
As a general rule, the greater the amplitude of price during the major phase... The greater the correction will be.
The first major phase we experienced was an increase of 11729% throughout 2011-2013.
The correction that followed was 82%.
Our second major phase was an increase of 2472% throughout 2013.
The correction that followed was 87%.
We're now in our third major phase at a current growth of 8697% from 2015 to present.
Correction phase, yet to establish itself.
I believe the correction to follow the next top will be of similarity to previous cycles, being a minimum of 50% and a maximum of 93%.
I'd like to present the works on major bull trends by H.M Gartley who wrote Profits in the Stock Market (1935).
How to recognise a bull market ending.
1. The daily volume has risen to an all time high.
2. Wide daily fluctuations are a regular occurrence.
3. Nearly everyone you meet appears to be in some way interested in the market.
4. Most financial news writers and financial commentators can see no reasons for any important decline.
"The thought of a bear market being around the corner is not seriously considered".
"A bear who presents what appear to be sound and logical reasons why a collapse is imminent, is considered to be either an out-and-out dyspeptic, or at least a very unpatriotic citizen."
"He can count on being very unpopular".
"Each bull market breeds a crop of traders who fail to recognise the unmistakable signs of a storm."
The above is relevant to bitcoin, you should always be analysing both sides of the market.
If we do achieve $20,000 I believe we'll see a major reaction.
I will be adding more analysis to this idea, there's so much that I could not cover it all in one, I've got a lot more thought behind this and where the market is headed.
This post is open to discussion, feel free to leave your own analysis below.
Please read the full post to gain a better understanding of what I'm looking at.
Today I'm analysing the weekly chart on BTC/USD.
As mentioned I'm using a logarithmic scale which presents prices in the proportional amount of percentage increase or decrease, providing us a fair representation of where bitcoin was, is and could be.
I've broken down each cycle measured from the breakout of an all time high to a new all time high being the market top.
Also detailing the percentage increase upon achieving targets at $20,000, $50,000 and $100,000 as there seems to be a lot of financial articles relating to these figures as the predicted long term value of the asset.
This month will be interested as CME and CBOE -0.29% launch bitcoin futures .
Below I have detailed the increase throughout each phase of the market from low to high on the weekly chart.
The median trendline seems to be acting as a support and resistance level as price returns to it over time, I would pay attention to this going forward.
As a general rule, the greater the amplitude of price during the major phase... The greater the correction will be.
The first major phase we experienced was an increase of 11729% throughout 2011-2013.
The correction that followed was 82%.
Our second major phase was an increase of 2472% throughout 2013.
The correction that followed was 87%.
We're now in our third major phase at a current growth of 8697% from 2015 to present.
Correction phase, yet to establish itself.
I believe the correction to follow the next top will be of similarity to previous cycles, being a minimum of 50% and a maximum of 93%.
I'd like to present the works on major bull trends by H.M Gartley who wrote Profits in the Stock Market (1935).
How to recognise a bull market ending.
1. The daily volume has risen to an all time high.
2. Wide daily fluctuations are a regular occurrence.
3. Nearly everyone you meet appears to be in some way interested in the market.
4. Most financial news writers and financial commentators can see no reasons for any important decline.
"The thought of a bear market being around the corner is not seriously considered".
"A bear who presents what appear to be sound and logical reasons why a collapse is imminent, is considered to be either an out-and-out dyspeptic, or at least a very unpatriotic citizen."
"He can count on being very unpopular".
"Each bull market breeds a crop of traders who fail to recognise the unmistakable signs of a storm."
The above is relevant to bitcoin, you should always be analysing both sides of the market.
If we do achieve $20,000 I believe we'll see a major reaction.
I will be adding more analysis to this idea, there's so much that I could not cover it all in one, I've got a lot more thought behind this and where the market is headed.
This post is open to discussion, feel free to leave your own analysis below.
Note
As I mentioned there was a part 2 coming for this analysis... There's a lot of technicals I'd like to cover.Below is the daily chart for BTC/USD showing the cyclical measurements on the daily chart.
The average correction is 36% at 16.5 days.
The average increase is 150% at 73 days.
To further filter this down I'll show the averages for only 2017.
The average correction is 36% at 16.5 days (the exact same average).
The average increase is 164% at 53 days.
What can we expect to see from this data? A correction of 36% after the current impulsive move ends.
From the current price this means price would drop to $9,300.
Note
Quick update on BTC/USD, we're now less than 4 days away from CBOE futures launching and this is when I believe we will see the correction.I have shown potential areas of decline based on the high once it has been found.
Note
The next correction is around the corner, prices are exaggerated across several exchanges.Note
4 different price feeds as of now.Coinbase are experiencing several issues due to an increased amount of activity: twitter.com/coinbase/status/938802155925913600
Note
As mentioned previously I believe this will be the overdue correction for BTC.Note
I picked out the correction with precision, price has now returned to support across many exchanges.One more day to go :)
Note
As mentioned previously upon price hitting the $20,000 region I did expect a major reaction.That's exactly what we got :) price has now corrected 39% since the all time high, which is greater than the average correction for bitcoin of 36%.
I expect bitcoin to recover from this pullback in the bigger picture but a major correction of 50%+ is around the corner, it's only a matter of time.
Depending on how price moves over the next week we could see further downside, if we experience a major correction I have shown the 70% correction level.
As long as $12750 holds, we won't see price return to this area.
Note
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