For those who are considering buying cryptos around this time and or holding on for the mid / long term, the rapid influx of shorts today and possibly the frequent comparisons the 2014 crash might cast a fair amount of doubt into the picture.
The chart details most of this, but if we take a look a the weekly Bitcoin chart (about to close in half and hour), IMO , we see a lot of reasons for confidence:
- Three increasing green candles
- A divergence (albeit a small one)
- A big, clean crossover in the pattern crossing after a very neat consolidation just under 0. In my experience in smaller time frame, this signature is pretty bullish!
- Higher crossover, typically a thing (especially when the crosses over at the same time)
- 20VWMA is above 20SMA
- Throughout the 2018 *crash* OR pretty standard price action weekly time frame, the bottom hasn't been touched once. Plus the last low was further away from the bottom line (a further away from a than the previous being a well known indication of weakening trend strength)
- Likely that we are in the latter stages of a double / triple bottom with multiple instances of strong support
Comparison to 2014 (around this September time of year)
Whilst there may be some visual similarities with 2014 when just looking at the price, there are some significant differences when we stick the indicators on and a pretty dramatic different in worldwide adoption, awareness and trading . Here are some things that we saw in 2018 which did infact indicate a deeper crash / prolonged bear market that we do NOT see in 2018 (feel free to compare with above)
- was pretty oversold in June and shortly after crossing , crossed again even lower
- Shortly after second cross, which had only see a very brief and unconvincing cross, crossed again (shortly after the crossed from an oversold position - a well regarded prior confirmation for a cross)
- 20VMWA below 20SMA indicating is on the side
- At the start of September 2014, was actively diverging bearishly and heading below zero
In my opinion, on the weekly time frame we are looking at the end of a very neat correction to a massive run that is just about to tick over into bull mode again. We have just formed a weekly higher high, indicators are looking and we are very close to breaking a that won't leave many barriers ahead. It might turn out these recent shorts get used as rocket fuel!
There are barriers ahead, the testing of which upon breaking (i.e. resistance levels, daily 200MA, 10K .etc) could serve as some great entry points