The 2022 Tech Bubble Fractals and Sentiment AnalysisIntroduction
I was inspired by CryptoKaleo's post (original post below) on the "Next Tech Bubble", where he predicted a tech bubble to take place in the coming years based on the fractals of the 1998-2002 Dot com bubble market price action.
Disclaimer: This is not investment advice. This is for educational and entertainment purposes only. I am not responsible for the profits or loss generated from your investments. Trade and invest at your own risk.
Analysis
I myself have been also thinking about the probability of another 2000-esque bull rally for the Nasdaq index for a while now.
You can check out my analysis on the comparison between the market in 2020 and the Dot com bubble, which I posted last year:
My goal for this post was to not only compare the price action of the two periods through fractals, but also to research the headlines of financial news from the past, in order to more accurately research the sentiment that was reflected on the media. The quotes in red are direct quotes from 1998-2002, and the quotes in black are recent news that reflect the current market sentiment.
We can see a clear shift in sentiment; optimism > euphoria > fear > surrender.
The most notable parts of the cycle is the euphoria at the absolute top of the market, and sense of despair at the bottom of the market.
This figure will further help you understand the structure of a market bubble, and the market sentiment according to the price action of the market.
What's extremely interesting is that the Dot com bubble demonstrated a textbook pattern of a market bubble structure.
Conclusion
There may be multiple news that could potentially trigger the next market bubble. If one were to occur, it's highly likely that we see it happen in the tech/bio sector this time, where insane multiples are given based not on the current financials of the company, but the prospect of it. While there is also a probable case where we don't see a bubble at all, if it we were to see the market make parabolic moves up to overbought levels, referring to fractals of the past, and comparing the market sentiment of the past, could provide a guideline for us to refer to.
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Marketsentiment
The nature of the cryptocurrency market movementThat's what have we identified while trading and analyzing the market.
Three main movement types!
1. Exit from accumulations - breakouts of levels
2. Working with participants (bounces and corroding densities), trading market inefficiencies, collecting volatility, entries to continue the movement
3. Trading bounces (corrections): reversal patterns, density in the order book, volumes, catching knives
What do you think about this and how will you describe crypto market sentiment?
Stophunt playFundamentals:
Fundamental are mixed. Technical analysis will take the lead for this idea. We will target a smaller movement because there is no fundamental to drive the price.
Market sentiment and technical analysis:
This is one of my favourite setups to execute: we will take advantage of the too obvious retail traders setups and execute it in a way that we will enter while retail noobs get stopped out.
On this chart, I identified a setup that is obvious and very clean to every retail trader out there: Trend-line 3rd touch, 61,8% fib, nice S&R and 50ma. Based on this information, I know that myself 5 years ago would have taken this trade with my eyes closed. We will not enter this.
I will enter this trade based on the potential stop hunt that will occur from the grey circle (@1,96900). Normally, the stop hunt will reach 78,6% in confluence with my trendline, my KL and the 100ma.
My SL is large enough if the price needs to reach the 200ma and the lower supports. Lower than this and the setup is invalid.
Final tip:
When you are looking for a setup, ask yourself if this setup is beautiful to the eyes of new traders entering the market. If this is the case, you should use this information to tweak your analysis so you don't end up stopped out like them. They may have the right direction like you, but they won't have the good execution like you. ;)
NQM2021. How does this correction compare to Feb/March?The Feb/March correction had me a lot more worried that we were headed for a recession. This one feels like more controlled profit taking.
I think the mindset before was a lot of uncertainty mixed with panic, and now it feels more like the market strength is here to stay.
I think investors are less worried in general about an upcoming recession, and confidence in the markets is growing. To me this should equate to some healthy market activity of sustained growth and periodic profit taking. I can't support this with any facts and figures besides what I see on the chart and how it makes me feel.
I think the market is in an excellent state currently, and I don't see what would give money people cause for panic.
I am not a big panic'er in general, however, so that could be something to factor into any bias generation.
SPY - Called the top at 422, let's see if the retrace continues I called the SPY top at 422.
SPXL was hovering above $100 and I thought wow, what a recovery from $30 levels.
More than 3x returns? Likely not without retrace!
Next few days, we see SPY dropping. Today was the most impressive drop!
Might be a good time for yearly investors to "Sell in May, Go Away," if you are happy with your profits or family members need it. It's already been an amazing economic recovery for many.
If not, keep holding. Downturns happen, we'll see what kind of teeth this one has.
Silver in a new bullish channel!Due to the change in the price trend since March 8 and after hitting the strong support range of $25, it seems that Silver buyers are stronger in market which formed a trend bullish channel.
However, if the power is rediscovered for the sellers, it is not unexpected to hit the support range and return back to this position.
CVCUSDT,BinanceWhere is civic going? The price is in an uptrend channel in daily time, which has been able to reach the bottom of the channel.In recent days, buyers have appeared strong again and the price has started to move upwards from the bottom of the uptrend channel.We expect to fill our movement momentum to the top of the channel and reach our target.
NANOUSDT,BINANCEWhere is Nano going? With the price reaching the bottom of the bullish channel and the buyers gaining power, the price of cargo is expected Fill in your movement moment and reach the desired target and the canal roof.
Eth is leaving the bearish trend channelFurther to the treasury yield movement last week, the risk taking movement in market was done for a week. Therefore crypt market was declining deeply which made a bearish channel for Bit and Ether. However by starting this week and slipping on bond rate, again market came back to the risky assets and coins started bullish trend and already left the bearish channel and its boundary shadow. As you see the chart Ether is facing a tension zone of supply and demands which slowed the movement. In the other hand, we might not expect the high momentum like before due to the new market challenges and US administration this year.
Gold still in negative sentimentHowever Gold started last week with bearish move, but tried to do some correction until the tension zone between $1780-$1790
This bearish intend might continue due to the hope of more support from new US administration for economy recovery and also having more liquidity in Coins these days. Therefore highly recommended to traders look for short to trigger in this market.
EURNZD 1DWhich way is it going EURNZD?
As you can see, in the daily time frame, the price is on a downward trend and channel,We have seen a weakening of buyers of the euro against the New Zealand dollar in recent days.
That's why the price, which has once again reached the ceiling of the channel, we are witnessing stronger sales than the ceiling of the channel.
Therefore,According to Bank of New Zealand meetings this week if monetary policy does not change and The weakness of buyers over the past few days and the resurgence of sellers is expected to continue the next move to the bottom of the channel.
EURNZD 1DWhich way is it going EURNZD?
As you can see, in the daily time frame, the price is on a downward trend and channel,We have seen a weakening of buyers of the euro against the New Zealand dollar in recent days.
That's why the price, which has once again reached the ceiling of the channel, we are witnessing stronger sales than the ceiling of the channel.
Therefore,According to Bank of New Zealand meetings this week if monetary policy does not change and The weakness of buyers over the past few days and the resurgence of sellers is expected to continue the next move to the bottom of the channel.
Bit still in bullish trend!Further to the low interest of Central Banks around the world and due to the fact of highest momentum ever for last 6 months, BTC is in the first option of saving wallet for even Liquidity Providers globally. However, this momentum and hopes for economy recovery, shaped a big fear that "How much percentage to be left for it?!"
Looking deeply thought the 4H chart lead us to be more confident regarding this movement at least up to $55k for the short time.
Gold rolling down on dollar positive SentimentFurther to the positive news on new administration in white house in terms of Vaccination plan, Stimulus and employment; USD is gaining and recovering the lose and bringing hope for investor to again counting on the most valuable currency in the world. Therefore, Gold is in the long term down trend channel which was already predicted in previous ideas.
Follow us for more Gold ideas.
Gold Rally with strong momentum! After weeks of dollar gain in market, by confirming new administration in US and hopes for stimulus by new treasury secretory in White house, dollar started weakening since Wednesday and Gold with other valuable metals went on a high momentum rally after that. This rally crossed $1850 resistance zone and then passing long term down trend to move forward through $1900 resistance zone. Traders know that high momentum mostly will ended up with cycle change. Therefore better to wait to see the reaction after touching next resistance zone.
Why one cannot be completely bullish or completely bearish? Why one cannot be completely bullish or completely bearish?
The stock market consists of two major players. Some people are long traders they bet the stock price will go higher. They buy low and sell at a high price to make a profit. Some long traders buy the stock at a high price and sell at an even higher price. Some long traders look for bargain stocks.
Some other people bet the stock price will go lower. They are short-sellers. They don't own the stock initially, but they borrow the stocks from the stockbrokers and sell the stocks from a high price, then when the price drop they repurchase the stocks back at the lower price, return what they initially borrowed with interest back to the stockbrokers, and then profit the price difference.
We can interpret the security market as a continuous tug of war game between the long traders and short traders. Sometimes one side will win the game, and in that situation, the price will advance higher or lower. Sometimes one side will gain strength that means the price will speed up and advance faster. Sometimes one side will win, but then go in the opposite direction temporarily and that is a correction. Sometimes one side will win but will lose strength completely and reverse direction completely. Due to the rapid changes in the security market, one trader cannot be 100% bullish or 100% bearish.
Therefore, a market opinion may be "I am 70% bearish, and 30% bullish." That simply means that I am 70% confident that the price will go lower, but I reserve 30% market opinion that the price may hit a bottom and may reverse direction and go higher as the market story develops. When that happens, I am ready to liquidate my short position and willing to participate in the opposite direction or stay on the sideline.
Thank you for reading!
Greenfield
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Disclosure: Chart interpreted by Greenfield. Just a market opinion by Greenfield Analysis LLC for only educational purposes. This is not a recommendation. Greenfield Analysis LLC has no investment in any of the securities mentioned in the article, and no plan to initiate a trade in any of the securities mentioned. Greenfield does not receive any compensation for this writing. Investment involves substantial risk. You should consider carefully before making an investment. Investment at your own risk.
Will the daily downward trend of gold be broken ?!Due to two similar Movements in recent weeks, the price has approached the ceiling of the Downtrend channel and we expect to see the descending for Gold against the Dollar by any positive news near the New Year.
Of course, we know that the negative news and statistics of Pandemic continue and the stimulus has already left its effects on the market. Therefore, if there is no positive news from the United States (such as the decline in the Pandemic rate), the dollar may continue to weaken against gold.