Even though I don't like looking solely at time based analysis to judge bottoms and tops, i feel combined with other factors it can give on a sense for when inflection points can come forward and exhuastion might have happened.
What this chart does:
This chart looking at bitcoin bubbles on a daily chart through a regression trend analsyis. This uses regression trend line tool on trading view to determine a slope of best fit from start of uptrend until the subsequent bottom.
1. The definition of the start of the uptrend in this analysis is the day Bitcoin price closes above 10dma and ceases to close below 10dma the duration of the time.
2. The end chosen for the regression line tool is the bottom in july during the april rally.
The exact days chosen for those looking to view the chart for themselves ( I couldnt make it log scale or else tradingview messes up the regression lines) are january 6 2013 till july 6 2013. and october 5th 2013 till now.
Some insights:
april bubble
The time from start of uptrend ( close above 10dma to bottom) was 180 days.
Time from start of uptrend to time above regression line was 71d.
Time from start of uptrend to peak 91 days
Time above regression line in bubble one was 21 days,
followed by 51 days above regression line,
followed by 30 days below regression line before bottoming.
Time from peak to bottom:88 days
Time from bottom to next start of uptrend was 92 days.
novemeber-dec bubble
Time from start of uptrend till over regression line 42 days
time from start of uptrend till top: 60 days
Time above regression line: 30 days
followed by 51 days over
followed by (as of march 29th) 50 days below.
Time from peak to bottom: unkown.
Time from bottom till next uptrend: Unknown.
What does this mean?
1. Nov-dec bubble ramped up much faster then april bubble, which means more time under regression line is expected before bottoming as we've seen so far.
2. At around 180 days traders/investors might be more likely to reach inflection point
3. If you have been short for a while now is a good time to take profits as sentiment becomes volatile here.
4. If you have been long the last couple of weeks, might be worth going cash and waiting till we establish a new up trend or have a capitulation.
Overall I feel any behavior in the coming days will be highly back and forth from a time perspective. A lot of time (in bitcoin world 90 days is like 2 years) has passed since bubble pop and and a lot of volatility has ensued. Traders and investors have had countless of times to take profits and take positions and a shift from weak hands to stronger hands has continued to take place. While I wouldn't make any decisions based on this, I would be very cuatious going forward taking any positions, long or short.
Personally I am all cash and ready to buy on margin if I see signs of a 20%+ capitulation. if we establish new up trend over a 1-2 week period (close above 10dma) I might look to take a position (not on margin).
What this chart does:
This chart looking at bitcoin bubbles on a daily chart through a regression trend analsyis. This uses regression trend line tool on trading view to determine a slope of best fit from start of uptrend until the subsequent bottom.
1. The definition of the start of the uptrend in this analysis is the day Bitcoin price closes above 10dma and ceases to close below 10dma the duration of the time.
2. The end chosen for the regression line tool is the bottom in july during the april rally.
The exact days chosen for those looking to view the chart for themselves ( I couldnt make it log scale or else tradingview messes up the regression lines) are january 6 2013 till july 6 2013. and october 5th 2013 till now.
Some insights:
april bubble
The time from start of uptrend ( close above 10dma to bottom) was 180 days.
Time from start of uptrend to time above regression line was 71d.
Time from start of uptrend to peak 91 days
Time above regression line in bubble one was 21 days,
followed by 51 days above regression line,
followed by 30 days below regression line before bottoming.
Time from peak to bottom:88 days
Time from bottom to next start of uptrend was 92 days.
novemeber-dec bubble
Time from start of uptrend till over regression line 42 days
time from start of uptrend till top: 60 days
Time above regression line: 30 days
followed by 51 days over
followed by (as of march 29th) 50 days below.
Time from peak to bottom: unkown.
Time from bottom till next uptrend: Unknown.
What does this mean?
1. Nov-dec bubble ramped up much faster then april bubble, which means more time under regression line is expected before bottoming as we've seen so far.
2. At around 180 days traders/investors might be more likely to reach inflection point
3. If you have been short for a while now is a good time to take profits as sentiment becomes volatile here.
4. If you have been long the last couple of weeks, might be worth going cash and waiting till we establish a new up trend or have a capitulation.
Overall I feel any behavior in the coming days will be highly back and forth from a time perspective. A lot of time (in bitcoin world 90 days is like 2 years) has passed since bubble pop and and a lot of volatility has ensued. Traders and investors have had countless of times to take profits and take positions and a shift from weak hands to stronger hands has continued to take place. While I wouldn't make any decisions based on this, I would be very cuatious going forward taking any positions, long or short.
Personally I am all cash and ready to buy on margin if I see signs of a 20%+ capitulation. if we establish new up trend over a 1-2 week period (close above 10dma) I might look to take a position (not on margin).