BITCOIN 1st step into the Bull Cycle successful. One left to go.

Jul 23, 2022

This week's big development for Bitcoin (BTCUSD) has been the break above the 1D MA50 (blue trend-line) for the first time since April 21. On this analysis I compare the patterns of the current Bear Cycle and the past two in an attempt to find if this break can be a structured move into a sustainable recovery.

First of all, the time-frame on the candles is 1D (daily) but a lot of MA periods including the RSI and MACD indicators are displayed on the 1W because that prints a more complete picture. As you see the similarities of the current Bear Cycle with the past two are remarkable, despite it being an expanded flat correction as opposed to the other two which where sharp correction patterns.


** The Bear Cycle until now **
The RSI clearly shows that the top of the Cycle was in April 2021. That was followed by a sharp drop and rebound on the 1W MA50 (red trend-line), which is consistent with the past two Cycles. After the September - November 2021 pump that broke the sharp correction of the other two, the price quickly resumed the Bear Cycle model, was supported and rebounded near the 1W MA100 (green trend-line) to the 1W MA20 (yellow trend-line) where it was rejected. That initiated the final sell-off sequence of the Cycle, where the capitulation was again (as with the past two Cycles) evident by the 1W MA200 crossing below the 1W MA100. The June 18 bottom has been formed just above the -0.618 Fibonacci extension (counting as 0 the Low of the 1W MA50 test) and that caused a rebound that broke this week above the 1D MA50. As you see on the chart, all this has so far been remarkably consistent with the past Bear Cycles.


** What's next? **
To answer this we naturally have to look at how the past two Cycles traded. Following the 1D MA50 break-out, neither Cycle was able to post a sustainable rally. Instead, it was only when the price broke above the 1W MA20 and (especially in the case of 2015) above the 1W MA50 too, that the market was able to rally into the Bull Cycle. So naturally what we would like to see next to largely confirm a Bull Cycle turnaround, is a break above the 1W MA20, which currently is considerably higher, trading at 32700, but declining rapidly. Until then, we continue to be in an Accumulation Phase.



But what do you think about this comparison? Do you need to see a break above the 1W MA20 to confirm the recovery sentiment into a new Bull Cycle or feel that this week's break above the 1D MA50 is strong enough on its own? Feel free to share your work and let me know in the comments section below!



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