Good day Hiveians!
Join me in analyzing the crypto markets!
Okay, I am officially calling it (and perhaps a bit late): but the next crypto bull run has very likely already started. This might be a surprise to you if you have been reading my crypto analysis posts in which I have generally been more bearish. But the recent developments have led me to take on a more bullish sentiment.
A bull run, however, does not imply a linear upward movement in price. It means that there will be corrections in a market that is generally moving upwards. You can see them indicated in the long macro cycle in this chart of bitcoin/USD:
So far we have seen two big upward movements starting in 2012 and 2015. The current movement had its trough very likely in 2019 and has since then generally been moving upwards. You can see that these movements are becoming more spread out and that every phase is taking longer to complete than the phase before it.
The orange lines are indicating a linear trend from the bottom of each of these upward movements until the trend becomes parabolic. Within this, there can still be big swings of up to 40% downwards, but the trend is clearly upwards. The last big correction was in March of this year when Bitcoin saw a 60% drop. This was a very good buying opportunity. In past posts I argued that the price of Bitcoin may return to 4k-6k levels, but I made a mistake: I forgot to consider market sentiment; in this case the halving event (they can be seen as the vertical blue lines). This led the price to continue to increase although from a techical viewpoint there were many indicators that pointed to lower prices. This, however, has not transpired.
Instead, if you look at the last bull run you can see that prices continue to rise once certain thresholds are breached. One such significant event was the break out of the large symmetrical triangle indicated in the graph below:
To me this is a very clear buying signal. However, there is still at least one caveat: volume is still down for th March-August period. This could indicate a slight correction to 10k-12k levels which in my opinion is a great buying range.
The bull phase is even more clearly visible for other big coins such as Ethereum. We can see that in July of this year the triangle indicated in the chart below was breached sustainably. In comparison to the last bull run, you can see that prices hardly corrected back down, meaning that the price of Ethereum will very likely not correct significantly downwards again.
However, I think there might still be good buying opportunities in the 300-400$ price range.
Like always this analysis deals with probabilities and does not factor in unforseen events. But based on the previous bull cycle, prices should in general be moving upwards. Let me know what you think!
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
Check out the Love The Clouds Community if you share the love for clouds!