Hi Traders
There has been some discussions lately on the comparison of the 2014 crash to the current situation. I have been analysing the correlation over the past few weeks so I thought I would post my take.
The biggest thing I hear is that the 2014 was caused by Mt Gox. Maybe it did, maybe it didn't. I'm assuming it didn't, that was a bubble correciton, and we are looking at another bubble correction. Anyway...
I have used the 200 EMA and 100 EMA for this comparison in log scale.
For 2014 I have started the fib retracement scale (fib-r) from $0, as this was the end of the first major impulse from inception.
For 2018 I have started the fib-r at $236. From the graph you'll see this is the first upward trend before the first major impulse upward at the the ema cross - Oct/Nov 2015. This would indicate the start of the bull market (just completed) and the completion of the bear market from 2014. This indicates the most recent bull market was just over a year long, and the subsequent bear 21 months.
I have use fib horizontals fib-h for time reference (not for pointing any specific fib time levels)
The .236 was positioned to coincide with the curvature of the 100EMA on both corrections as a standardised point. I would estimate the current correction is moving TWICE as fast as the 2014, based on time of piercing the EMAs.
What you'll notice on both corrections, the 100EMA gets pierced at the same time in relation to fib-h, then pushes down to pierce the 200EMA down past the .618 fib-r. Bounces back up to almost the .382 before looking to pierce the 200EMA again.
My estimation we are at the 23 Mar on the 2014 chart. Even the RSI levels are almost identical.
The future will hold the following possiblities:
1. Current retracement to equal or just below (more likely) the previous low.
1. Rebound to the 200EMA resistance end Mar early April, then retest the low in early to mid April. The EMAs will be converging
2. Rebound from retest to push back up past the .5 fib-r to around $11000 (another lower high, and triple top). At this time the EMAs will start to cross. This will be confirmation of the continuation of the bear market longer term.
3. The full retracement will end up at the .786 fib-r $4550, and even push down in spikes past it to levels of $3500 toward the middle of 2018.
4. Bear run ends end of year around Oct/Nov (as the old bear was 21 months and the new cycle twice as fast). This will indicate a new bull cycle begins September, with a major Dec impulse.
Of course this is pure conjecture, and it is what I have been using privately to gain an understanding of POSSIBLE market direction.
I always continue to reassess. But so far it has been guiding me safely through.
I will use this information with EW, volume, Stoch RSI etc to get entry and exit points. With the rule of not being greedy.
Hope this is of some help, and I am sure many traders out there are already analysing both corrections. If it does pan out this way, there will be plenty of great trading opportunities no matter what the price is.
Appreciate a thumbs up if you like.
Education only, not trading advice.
Chur
There has been some discussions lately on the comparison of the 2014 crash to the current situation. I have been analysing the correlation over the past few weeks so I thought I would post my take.
The biggest thing I hear is that the 2014 was caused by Mt Gox. Maybe it did, maybe it didn't. I'm assuming it didn't, that was a bubble correciton, and we are looking at another bubble correction. Anyway...
I have used the 200 EMA and 100 EMA for this comparison in log scale.
For 2014 I have started the fib retracement scale (fib-r) from $0, as this was the end of the first major impulse from inception.
For 2018 I have started the fib-r at $236. From the graph you'll see this is the first upward trend before the first major impulse upward at the the ema cross - Oct/Nov 2015. This would indicate the start of the bull market (just completed) and the completion of the bear market from 2014. This indicates the most recent bull market was just over a year long, and the subsequent bear 21 months.
I have use fib horizontals fib-h for time reference (not for pointing any specific fib time levels)
The .236 was positioned to coincide with the curvature of the 100EMA on both corrections as a standardised point. I would estimate the current correction is moving TWICE as fast as the 2014, based on time of piercing the EMAs.
What you'll notice on both corrections, the 100EMA gets pierced at the same time in relation to fib-h, then pushes down to pierce the 200EMA down past the .618 fib-r. Bounces back up to almost the .382 before looking to pierce the 200EMA again.
My estimation we are at the 23 Mar on the 2014 chart. Even the RSI levels are almost identical.
The future will hold the following possiblities:
1. Current retracement to equal or just below (more likely) the previous low.
1. Rebound to the 200EMA resistance end Mar early April, then retest the low in early to mid April. The EMAs will be converging
2. Rebound from retest to push back up past the .5 fib-r to around $11000 (another lower high, and triple top). At this time the EMAs will start to cross. This will be confirmation of the continuation of the bear market longer term.
3. The full retracement will end up at the .786 fib-r $4550, and even push down in spikes past it to levels of $3500 toward the middle of 2018.
4. Bear run ends end of year around Oct/Nov (as the old bear was 21 months and the new cycle twice as fast). This will indicate a new bull cycle begins September, with a major Dec impulse.
Of course this is pure conjecture, and it is what I have been using privately to gain an understanding of POSSIBLE market direction.
I always continue to reassess. But so far it has been guiding me safely through.
I will use this information with EW, volume, Stoch RSI etc to get entry and exit points. With the rule of not being greedy.
Hope this is of some help, and I am sure many traders out there are already analysing both corrections. If it does pan out this way, there will be plenty of great trading opportunities no matter what the price is.
Appreciate a thumbs up if you like.
Education only, not trading advice.
Chur
