Bitcoin is likely to enter a bearish market as a never-before wrong signal just got triggered.
Bitcoin Headed Towards Bear
Bear market is defined as a decreasing set of prices for various types of assets. A bearish investor wants to profit from the movement of dropping prices. You can think of a bear, swinging his big paw downward on the investment, crushing prices.
» Read more
» Read more
‘ href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>Bear Market?
As pointed out by a pseudonymous trader on Twitter, there is a certain signal that has consistently been right in the previous BTC cycles.
The signal in question is the Super Guppy indicator, a method that is based on exponential moving averages. Simply put, the technique is used to capture the difference between the price and value of Bitcoin.
Using Super Guppy, it becomes possible to tell whether the market is bearish or bullish.
Let’s take a look at the previous Bitcoin cycles. Starting with the 2011 run, here is how the Super Guppy chart looked like:
The 2011 BraveNewCoin Liquid Index For Bitcoin
Note that when the market becomes bullish, Super Guppy turns green. Similarly, for a bearish one, the indicator turns red.
As you can see in the above chart, Super Guppy was right about the Bitcoin market during the period.
Next, here is how the 2014 run looked like:
The 2014 run forms two peaks before going all the way down
Similar to the 2011 run, the 2014 cycle was also predicted accurately by Super Guppy. Here, another bullish reversal happened in the middle of the cycle, which the technique was also right about.
Related Reading | Bitcoin Hash Rate Goes On Death Spiral Post China’s Crackdown On Miners
Lopulta, to add to the credibility of the method, here is the 2018 cycle:
Super Guppy indicated correctly about the market during this cycle as well.
A common misconception regarding the method of moving averages is that it is a lagging indicator, and it only notes the past trend. However, that is untrue; Super Guppy is rather a warning for the upcoming market trend.
Is It Truly A Bearish Market?
Now that it seems like the Supper Guppy indicator does seem to hold some weight given past cycles, here is how the 2020 BTC cycle looks like at the moment:
The current cycle
As Super Guppy has turned red now, and given the pattern of the other curves, it seems like the cycle is entering into a bearish trend.
Related Reading | TA: Bitcoin Stuck Near $35K, What Could Trigger A Strong Rally
However, it doesn’t mean BTC is going to hit rock-bottom. It’s possible the Bear
» Read more
‘ href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear market is only short-term, and soon the indicator might turn green again.
Also, some other signals show that Bitcoin hasn’t reached its peak yet, which means the cycle might indeed see another bullish reversal.
At the time of writing, BTC is priced around $36k, up 14% in the past 7 days.
Bitcoin seems to regain an upwards trend | Lähde: BTCUSD on TradingView
Some other signals also show that whales have started accumulating, which is another positive sign for the market.
Featured image from Unsplash.com, charts from TradingView.com