🔥 Bitcoin Signaling 50% Drop? Previous Cycles Compared

14 באפר׳ 2022

Over the last few weeks I've shared a couple of longer-term ideas and cycle patterns on BTC. All of them are equally wrong and right at the same time, no one can tell you what will happen in the next few months. Keep an open mind, discover different outcomes and act on them once they occur.

In today's BTC analysis I want to shed some light on the 3-day death crosses that we've seen before. A death cross occurs when the 50-day SMA crosses below the 200-day SMA and is a classical bearish signal.

In the previous two cycles, a 3-day death cross after a strong bull-market would signal that a 50% drop was near, see the charts below.

2017 cycle:


2013 cycle:


The idea that we're potentially just a couple of weeks away from another 50% drop seems a very dire outlook. However, seeing the current instability in the stock markets and the world in general does not support a bullish narrative. A drop like this will most surely go together with a strong bearish move in the stock markets.

On the other hand, all the 50% drops after a 3-day death cross have signaled a macro bottom. This macro bottom would be the best time to buy in BTC for the next cycle. Furthermore, this drop would signal the start of another cycle and set us up for a move in 2023-2024.

The white bars are copied from the 2018 drop and are there to merely show how a 50% drop could look like. Assuming we're going to trade around 40k for the weeks to come, a drop to 20k would not be unthinkable when looking at the past cycles.

Happy trading!