Bitcoin Cycles: Machine learning (kNN) Sentiment Anomaly Insight
Market Cycle Analysis with the the Machine Learning: kNN sentiment Anomaly detector indicator
When analyzing the Bitcoin market on a daily time frame (1D), certain recurring patterns stand out. Using the Machine Learning: kNN sentiment Anomaly indicator, we observe several phases that seem to repeat at regular intervals:
1. End of Bull Market: Following a price expansion phase, the indicator shows a significant drop, accompanied by a prolonged green background color.
2. Indicator lateralization Phase (Bear Market): In this phase, while the asset’s price shows a downtrend, the “Amplified K Distance” line remains relatively stable, hovering around the value of 0, indicating a lateral movement in the indicator.
3. First Expansion: A new price expansion phase emerges. The indicator then shows a spike upwards, signified by a red background color. This rise is followed by a moderate correction (Excluding the COVID black swan event), which could foreshadow the beginning of a market bubble.
4. Bull Market Phase: During this upward trend period, the “Amplified K Distance” line shows a gradual downward trend, culminating in a pronounced oversold peak, signaled by a green background color. This stage suggests a saturation of the bull market and potentially heralds the transition to a new cycle, as previously described. Back to step 1.
So far, this pattern seems to have occurred twice on Bitcoin, between 2014-2018 and 2018-2021. The current signs, from 2021 to 2023, suggest that we have already passed through the first three stages and are currently in a correction phase after the first expansion. The future market trend remains uncertain, and while this indicator has shown precursor signs in the past, it is essential to approach any prediction with caution. The efficacy of this indicator in predicting future market cycles remains to be validated over time.
When analyzing the Bitcoin market on a daily time frame (1D), certain recurring patterns stand out. Using the Machine Learning: kNN sentiment Anomaly indicator, we observe several phases that seem to repeat at regular intervals:
1. End of Bull Market: Following a price expansion phase, the indicator shows a significant drop, accompanied by a prolonged green background color.
2. Indicator lateralization Phase (Bear Market): In this phase, while the asset’s price shows a downtrend, the “Amplified K Distance” line remains relatively stable, hovering around the value of 0, indicating a lateral movement in the indicator.
3. First Expansion: A new price expansion phase emerges. The indicator then shows a spike upwards, signified by a red background color. This rise is followed by a moderate correction (Excluding the COVID black swan event), which could foreshadow the beginning of a market bubble.
4. Bull Market Phase: During this upward trend period, the “Amplified K Distance” line shows a gradual downward trend, culminating in a pronounced oversold peak, signaled by a green background color. This stage suggests a saturation of the bull market and potentially heralds the transition to a new cycle, as previously described. Back to step 1.
So far, this pattern seems to have occurred twice on Bitcoin, between 2014-2018 and 2018-2021. The current signs, from 2021 to 2023, suggest that we have already passed through the first three stages and are currently in a correction phase after the first expansion. The future market trend remains uncertain, and while this indicator has shown precursor signs in the past, it is essential to approach any prediction with caution. The efficacy of this indicator in predicting future market cycles remains to be validated over time.
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