Author: Riyue Xiaochu Source: @riyuexia ochu
The market may start an upward trend within the next month. Considering that the time overlaps with the bull market, this upward trend is likely to be a bull market.
But please note that the market trend is a continuous process, not a one-step process.
1. The market has satisfied the “falling long enough and falling too much”
The source of an upward trend is a sufficient decline. In simple terms, the market is a decline, and after the bottom is formed, it starts to rise. In terms of the decline, BTC has fallen from a high of 73,000 to a low of 53,000, and the decline has reached 27.4%. After 21 years, due to the market's consistent bull market expectations, the decline of BTC adjustment will not be as large as before. For example, in the second half of 23 years, BTC only fell by 21%. In terms of time, from March to July, the adjustment time reached 4 months. Although it is shorter than before, it basically meets the sufficient time for the decline.
Not to mention Altcoin, the decline is generally over 80%.
2 Technical indicators show bottom signals
First, at the 53,000 position in July, RSI showed a daily oversold bottom divergence. RSI oversold divergence has become the bottom of the daily level many times in history, with a very high accuracy rate. After falling to the ma120 daily line, the market quickly stood on the ma120 daily line. I have systematically studied various technical indicators and conducted backtests. RSI and Ma120 daily lines are relatively effective indicators sorted out from various indicators.
3. Substantial strength of the market
Why was BTC substantially weak at 70,000 in March, and is substantially strong now at a similar price? The ancients said:
You can know a person by observing his words and deeds. This is true for people and the market. If you are a banker with large funds or have deep connections to get key information, you can naturally influence the market. However, for ordinary people like us, we need to check the corresponding trend of BTC based on major market events and broad views to observe the substantial strength and weakness of the market.
In March, ETF funds drove the market up all the way, and there were a lot of good news in the market, and the overall bull market was expected to come. However, the market stagnated at 70,000, and the altcoins peaked one after another.
In July, the German government sold BTC, Mt. Gox paid compensation, and the US government moved BTC. These were not only negative news, but also real selling pressure. After several months of weak market conditions, many people are now bearish on BTC. As for the actual trend of BTC, the German government has sold all its BTC, and Mt. Gox has paid more than half of its compensation. However, the BTC price is still around 67,000.
In summary, the market is bearish, there is bad news, and there is huge selling pressure, but BTC is still strong. So it is substantially strong.
Several other issues
4. Not enough time at the bottom
Indeed, the ideal situation is to have a bottom oscillation after the drop on July 13, and to have sufficient turnover. In the past, it took about 1 to 2 months. However, BTC pulled up again after a short one week.
To be honest, I was also hesitant about this. And I also noticed that BTC was rising against the trend despite the negative news of the German government's sale. There are two possibilities here.
1) The 53,000 level is not the bottom, it is just a rebound
2) There is capital in the market scrambling for chips because the BTC bull market is approaching, so the time it stays at the bottom is relatively short.
Considering other performances, the second possibility is more likely.
5 About Trump
All of Trump's events were not factored into my analysis.
6 Uncertainty of trends
The certainty of this uptrend is lower than the last one because there are several uncertain factors affecting the market.
1) The bottom did not oscillate for a long time
2) Mentougou still has more than 80,000 BTC distributed, and the US government's BTC also shows signs of movement
3) The US stock market is at a high level, and it is uncertain whether it will adjust. I don’t understand
7 Recommended Operational Strategies
In terms of operation, we will operate according to the highest probability, that is, according to the market that is about to start. I personally recommend holding 50%~60%, and increase the remaining BTC position when it breaks through the previous high of 73,000. In case the market moves in a low-probability situation, you can increase your position during the second plunge.
Because the biggest future gains will come from the altcoin market after the main uptrend of BTC, we just can’t expect too high a return for the first stage of BTC holdings. At this stage, it is recommended to mainly hold BTC.
