BITCOIN Market Cycles: Divergence and Convergence.

2019年5月16日

On this analysis I compare Bitcoin's two most recent cycles: the 2014 - 2016 and the current one 2018 - 2019.

What stands out is that even though they both followed the same trend line (i.e. after the peak the bear market followed, a bottom was made on the parabolic curve and then the new bull cycle gradually started), they tend to diverge at some parts, only to make contact again.

It is obvious that during the bear market the current cycle (2018 - 2019) has been leading the previous one (2014 - 2016). What I mean is that when the diverged the current cycle moved below the previous one. It can be argued that it led the "bear market race".

It should then be no surprise tha at the moment (and after the bottom has been made) it appears to be also leading the "bull market race". The new diverge has already taken place and it appears to be seen if this pattern is confirmed by another contact.

It is also quite remarkable that the duration of the past two divergence-contact sequences was around 145 days on each pattern. This makes me assume that the current sequence may also last roughly 145 days which puts the next possible contact in the coming September (2019).

Of course this model is only based on specific market dynamics and ignores whatever fundamentals (bullish or bearish) may hit the market. It definitely doesn't provide trading levels but purely intends to point out that the return to the "mean" (i.e. contact) is a possibility for this pattern.


What are your thoughts? Do you think such comparison is futile or the pattern dynamics can push the current price action to another "contact"?



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