Two major characteristics of the Bitcoin bull market - pure technical analysis perspective
Conclusion:
1. On the daily chart, EMA20 and EMA50 must form a bullish arrangement, that is, the short-term moving average is above the long-term moving average;
2. After the price falls back to EMA20 and EMA50, it gradually forms higher highs and lows, showing a clear upward structure.
The above is the conclusion, but the key is to understand the details behind it to truly grasp the meaning of these two simple signals. Otherwise, you may feel that "the truth is right, but it seems to be missing something."
Details:
1. It usually takes 1 to 2 months to form the price structure mentioned in Conclusion 2 on the daily chart, as short as 1 month and as long as 2 months. People tend to feel numb to long periods of time, that is, within these 1 to 2 months, you may feel that the market has not changed much, and your established trading ideas are still bringing profits.
2. During this brewing period, you will see a sharp and rapid decline in Bitcoin, but the key is that the price will usually recover quickly after the decline. At this time, you may have a clear feeling: "I can't go short" or "I have always had the logic of shorting, but it fails" - even if the direction is correct, the short position has no profit.
3. Because you need to wait for the gradual formation of the structure, you will inevitably miss the best buying point on the left. Therefore, when the price pattern is finally formed, it is easy to have an anchor effect psychologically, clinging to the previous low, constantly suggesting to yourself or subjectively hoping that the price will fall back to the previous low again. "I will go all in if it falls back to the previous low" or "I will get on the bus if it falls back to the previous low."
Due to the length of the article, only three details are sorted out above. In fact, the dynamic changes of the market during the formation of the bull market are far more than these (I will also pay attention to the market data, divergence, overbought and oversold, etc.). Applying these theories to actual transactions is another matter. If you are interested, I can share more later.
Finally, a reminder that the bull market will not come because of someone's loud voice or extreme words. If you want to make money in the market, the first task is to filter out risks, especially those sources of information that make you anxious, otherwise they will become the price or fuel for the launch of a bull market.
