There is such a figure in technical analysts of the markets - "Death Cross", this is when the 50-day moving average crosses the 200-day moving average, it is considered that it is an indicator of the arrival of a long-term bear market . I've never really looked at such an intersection in the past, but recently about the "Death Cross" on bitcoin talked a lot, and I decided to do a little research. It all started, apparently from an article in the middle of March in Bloomberg: Bitcoin's ‘Death Cross’ Looms as Strategist Eyes $2,800 Level , in which analyst Annie Massa discusses the situation with the BTC. At that time, the intersection of the averages had not yet occurred, it was only anticipated, but Annie's main idea was: "cryptomaniacs believe that this has nothing to do with crypts, but in fact it signals the onset of the bear market phase."
In principle, I agree with Bloomberg analyst in the sense that all markets are the same, and they do not care about what cryptomaniacs think)). But how terrible is the very implementation of the "Death Cross" (DC)?
Bitcoin does not have such a long story, but after looking through the daily chart, I just saw the amazing similarity of the current situation to the situation of 2014. Then, 7 april 2014 DC was formed at BTC price at about $ 440 (after the rapid growth to $ 1150):
After that, after 290 days, the bottom was reached at the level of ~ $ 215, and new growth began only after 550 days!
And what we see now is DC on March 31, 2018, at about $ 7,000 (after also a rapid increase of $ 20,000):
the setup is almost the same, and by analogy with 2014 it is possible to assume the bottom somewhere at the end of 2018 at the level of $ 3000-3500, and new growth can not wait until the fall of 2019. I drew the arrows on the graph of the way I liked to reach to $ 3000, I'll see how the cue ball goes on. True, in my version the bottom is reached much earlier - in July 18th. On that there is a good reason - I'm just bored waiting for the end of the year in a tedious sliding downtrend)))
In general, the figure "Death Cross" has the right to be taken into account, in my opinion. Having studied various charts of traditional assets, indices, oil, gold, I formulated such additional signs:
- The figure is stronger if it was formed after rapid and powerful growth, "pampa".
- The cross is the cross - at the intersection of the averages, than they are perpendicular to each other, the better for realization.
- With a long-term lateral movement, the averages are not far from each other and the figure is meaningless.
I really like the idea of the bitcoin falling to $ 3000. It will be very much under the laws of the market - early buyers will be deceived by the market.
p.s. But of course we do not forget that markets do not always repeat with such precision, we work with probabilities and no one knows exactly what will happen. For example, three consecutive failed "Death Crosses" on the main stock index of the world S&P 500 since 2009:
now is forming the fourth, it seems...