If $13,000 to $9,000 is not a bear market, will the history of bull market reversal repeat itself?

Just after the two hearings on Libra in the U.S. Congress, Bitcoin finally showed some vitality in the short-term trend. In the eight hours before this article was written, the price of Bitcoin rebounded from around $9,150 to around $9,800, an increase of 7%. More importantly, the relative strength index (RSI) indicator is also struggling to break the downward trend, which means that the market is moving further upward, which may indicate a temporary reversal of the "bearish" trend.

Two reasons foreshadow the end of "Little Bear"?

It is not clear whether Bitcoin has reached the bottom of its recent sluggish performance. If we look back at the history of 2017, we will find that the "bearish" period before the big bull market may last more than six weeks. However, some analysts have said that the current decline should be over, such as CryptoHamster, who proposed two reasons:

First, the one-day Relative Strength Index and Stochastic Iteration indicators are at their lowest levels in two months, which means that the market has entered the "oversold" range. (Note from Planet O-Daily: Oversold is usually used in stories to refer to a security price that may rise in the near future after a significant drop in price) In addition, the Moving Average Convergence Divergence indicator has also touched the "0" level upward, which is generally a positive signal;

Secondly, the Elder's Forse Index has reached its lowest point since November 2018, with historical volatility almost reaching 100%, which means that volatility has returned to normal levels. (Note from Planet Jun o-daily: The Elder's Forse Index is an indicator designed to show the strength of a trend)

Is Bitcoin reaccumulating?

It is undeniable that after a period of popularity and reaching a high of $13,000, Bitcoin has indeed shown some decline recently, and the bulls have not been able to accelerate as expected. In the past week, the price of Bitcoin has fallen by about 25%, while altcoins such as Ethereum and Litecoin have fallen by more than 30% to 40%. At the same time, Bitcoin trading volume has also begun to decline, market sentiment has continued to decline, and Google Trends' search interest in "Bitcoin" and related keywords is also on a downward trend.

Although this dramatic drop is seen by many who are bearish on the cryptocurrency industry as the "end of the bull market," in fact, based on historical trend analysis, Bitcoin needs this kind of pullback - more importantly, this pullback may be healthy.

Why do I say so?

If Bitcoin’s rise from $3,150 to nearly $14,000 was the “expansion phase,” what is happening now is actually entering the “re-accumulation phase.”

This is very important because, looking at Bitcoin’s history (e.g. 2017), each block incentive halving is preceded by a new price low and a new price high — it would be strange if it didn’t happen, and whether it goes higher or lower, it means that Bitcoin will not continue to rebound to an eye-popping high, and of course it will not completely collapse. So, in a sense, this pullback is necessary and expected.

So the question is, where will Bitcoin’s “re-accumulation phase” bottom out this time? Here we have to introduce a low-key “big bull” analyst CryptoKea, who is little known but accurately predicted earlier this month that Bitcoin would fall to at least $9,700 in the near future. Now, $8,000 seems to have become the consensus of analysts, at least during the current market downturn.

CryptoKea analyzed the Mayer Multiple indicator, which is mainly used to determine speculative bubbles and the end of short positions in turbulent markets. It refers to the multiple of the current Bitcoin price exceeding the 200-proposal moving average. If it is higher than the long-term moving average, it is bullish, otherwise it is bearish. CryptoKea believes that if you evaluate the current Mayer Multiple, you will find that the current correction is very similar to the first "major correction" before the 2017 bull market.

He noted that if history repeats itself in 2012 and 2017, where a short-term bearish trend preceded a bull run, the same bull reversal could happen in the 2019 market.

This article comes from newbtc, original author: Nick Chong

Odaily Planet Daily Translator | Moni

Source: Daily Planet

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