As we all know we are currently in a bear market however, there are a lot of opinions going around that the market has bottomed out followed by the absolute opposite. In the following paragraphs, I shall give my opinion on the current market using a reference to the MACD indicator and the direct correlation to previous price action in comparison to the current market action.
Let me start off by saying that I think the bottom is not in based on the fact that the world is potentially headed into a deflationary period as the FED tries to solve the inflation crisis. This is great news for the long term as our buying power will increase over time however, in the short to medium term there is a substantially high chance we are headed into a recession following these interest rate hikes (if we are not in one already). This is my political reason why I feel we are moving lower. I shall be expressing my technical opinion in the paragraphs that follow.
MACD: I could not help but notice a clear correlation between the current price action and that of the price action earlier in the year. I have numbered my points of correlation from 1-4 each segment matching one another. The vertical lines are not just randomly drawn, they signal a point of convergence and divergence in the MACD. Let me start by showing a screenshot of the daily MACD indicator of BTCUSD:
As you can see, there is a clear correlation between the 2 timelines.
Segment 1-2: This section is one of stagnation as the price had closed only slightly higher in both instances.
Segment 2-3 (The Flagpole): This segment is bearish, forming the eventual flagpole for the pattern to come found in both instances. Not only does the price action look the same but it bares almost the same decrease in the percentage within the range. The difference is -31.6% and -40.2%.
Segment 3-4: This segment forms the majority of the body of the bearish pattern which has already broken out in both instances. This is already a bearish signal however this article is based on what is to come.
The percentage of price increase between the 2 timelines are very close considering the fact that the first timeline had a more volatile body. The correlation in percentage is 40.32% to 35.25%.
Now, what happens next? Looking at the first pattern breakout we see the price fall to as low as $25288 however, the price averaged out around $29k where it reset. Therefore, it is safe to say the price had a 40% decrease in value.
So if the price had to play out the way it did in the previous correlation a conservative bet would be to say that the price is heading for $15k, which is an exact 40.33% move from the swing high. I would first like to see the price retrace up to the previous support turn resistance to solidify a healthy market structure however, the market is looking fairly healthy considering all that's going on around the world.
Many are calling for $10-$12k as a bottom however it could be argued that $15k makes more sense at this moment.
Let me know what you think about this perspective and whether you agree or not.
@TradingView
Let me start off by saying that I think the bottom is not in based on the fact that the world is potentially headed into a deflationary period as the FED tries to solve the inflation crisis. This is great news for the long term as our buying power will increase over time however, in the short to medium term there is a substantially high chance we are headed into a recession following these interest rate hikes (if we are not in one already). This is my political reason why I feel we are moving lower. I shall be expressing my technical opinion in the paragraphs that follow.
MACD: I could not help but notice a clear correlation between the current price action and that of the price action earlier in the year. I have numbered my points of correlation from 1-4 each segment matching one another. The vertical lines are not just randomly drawn, they signal a point of convergence and divergence in the MACD. Let me start by showing a screenshot of the daily MACD indicator of BTCUSD:
As you can see, there is a clear correlation between the 2 timelines.
Segment 1-2: This section is one of stagnation as the price had closed only slightly higher in both instances.
Segment 2-3 (The Flagpole): This segment is bearish, forming the eventual flagpole for the pattern to come found in both instances. Not only does the price action look the same but it bares almost the same decrease in the percentage within the range. The difference is -31.6% and -40.2%.
Segment 3-4: This segment forms the majority of the body of the bearish pattern which has already broken out in both instances. This is already a bearish signal however this article is based on what is to come.
The percentage of price increase between the 2 timelines are very close considering the fact that the first timeline had a more volatile body. The correlation in percentage is 40.32% to 35.25%.
Now, what happens next? Looking at the first pattern breakout we see the price fall to as low as $25288 however, the price averaged out around $29k where it reset. Therefore, it is safe to say the price had a 40% decrease in value.
So if the price had to play out the way it did in the previous correlation a conservative bet would be to say that the price is heading for $15k, which is an exact 40.33% move from the swing high. I would first like to see the price retrace up to the previous support turn resistance to solidify a healthy market structure however, the market is looking fairly healthy considering all that's going on around the world.
Many are calling for $10-$12k as a bottom however it could be argued that $15k makes more sense at this moment.
Let me know what you think about this perspective and whether you agree or not.
@TradingView