The Next Bull Market

Using Patterns and Technical Analysis

Using this chart; the Generic Financial Bubble Chart, found on google, shows an example of a financial bubble. A financial bubble is the mainly considered, “the bubble"; also referred by the media, they say "the bubble will pop" or "Bitcoin is a bubble". As a lot of people would either agree with that statement or agree with a counter belief, this isn’t a bubble, “Bitcoin price could hit $50,000 this year, experts say.” The media is always about the “experts?” Did they forget about the real Bitcoin OGs that have made millions of dollars off of this technology and the real information? That’s when people follow these statements and buy bitcoin without caution at $20,000 thinking it will reach $50,000 dollars. Oh, what’s that? Down a few thousand overnight? It should go back up, bitcoin is invulnerable, right? Wrong, what happened? It almost it a double top by climbing back to $17,000 thinking everything is going to go well; instead, it fails. That is when the people who use technical analysis to overcome the “fear” as shown in the image above. Let’s compare the bitcoin price history and this Generic Financial Bubble Chart.

FINANCIAL BUBBLE CHART AND BITCOIN

Just look at both for a minute, they look relatively the same. This is a pattern and has happened before. Before I get into this example of this pattern taken place in the stock market, let’s describe what’s going on. So at first, you can notice that the price was building up somewhat slowly, along with its correct long-term trend line.

In the beginning, see the price dips below the trend line (or mean) during March of 2017? This is the start of a take-off shown in the chart. Now during the next ~30 days, the price grows a little faster than normal and goes above the trend line. What happens next? The first sell-off, it drops and seeks attention. It then goes back up as it hits the bear trap and grows even faster. This is caused by media attention. As the price exponentially grows and gets higher and higher from the trend line, it gets more and more attention and enthusiasm.

A little after the beginning of November, the price grows even faster than normal. The greed comes to place, this is a red flag when it comes to the price growing way too fast. Greed is never a good thing and this would never grow forever, as it is indeed a bubble. Then the price drops for the first time at $20,000, this is the denial phase. Not too shortly it stops at ~$14,000 which is the bull trap, then goes back up to $17,000 which is the return to “normal” phase.

Why is this the phase? Media, greed, and etc. The greed in people would think this would hit $50,000 in a month or a year. That would be quite the investment but then people got too scared and started to sell rapidly shortly after. Now for an actual example of this bubble chart becoming a realistic and very predictable pattern.

AMAZON FINANCIAL BUBBLE PATTERN

Here is a chart to show the price of Amazon from 1997 to April 6, 2018. Notice anything in particular? Right, this indeed looks like a bubble; but this is a longer time period so things are similar and different. Today, it looks like we are experiencing the beginning of a denial phase; due to the 200 point drop in about a month. But let’s look back at the late 20th century, there is something interesting to look at.

Yes, it’s another bubble. But this is a pattern, see how the highest this went was 110? Where was a double top that acted nearly the same as the Bitcoin price. About 20 years later, the price is 10 times higher than the previous peak and experienced the same media attention and enthusiasm pattern. This one was much more sudden, more related to the bitcoin price. But yes, the stages are pretty much the same just laid out a little differently since this was a double top. But notice, this whole event took about 4 - 5 years to notice what happened. Here, we can actually see the despair phase that wasn’t shown in either of the previous pictures. I believe bitcoin will reach this stage and take 2x longer to reach its new high just like Amazon. Amazon took 10 years to climb past through its resistance line (Around $110). Here is a picture of the chart with the phase I believe we are currently in; denial.

You can also notice that the volume is starting to increase during the supposed denial phase. This is a HUGE sign the further price decline will continue for a while and drastically. The reason is that a lot of people are noticing the bubble is currently ending and it's time to get out as soon as possible!

SO WHAT CAN WE DO?

For bitcoin, I am planning on waiting for future action. I wouldn’t HODL a single satoshi until the bitcoin price hits near its original mean or trend line. This around $3,500 - $4,500 (depends on further technical analysis and support tests. But, it is best to see what happens in the future if it crosses that line (I believe it most likely will) and sees if it starts to slowly go up with the line like it should. If it does, great, I will put some money in this in see where it goes. Pretty much, this major crash is also very good on our end because of the mass media will soon give up their bitcoin and price will start to regulate like normal.

https(:)//i.redd.it/cz5jf5tgpxo01.jpg (When in doubt, zoom out)

EXTRA

There has been a lot of rumors and news about billion dollar investors such as George Soros, Rockefeller, and Rothschild as they believe Bitcoin is a legitimate market and the technology is real and much more advanced than our current economic system (and banks, security, cryptography, etc). Long story short, major investors are joining the cryptocurrency market.

SOURCES

https://www.reddit.com/r/CryptoCurrency/comments/88c17r/when_in_doubt_zoom_out/

https://www.tradingview.com/chart/?symbol=NASDAQ:AMZN

https://www.tradingview.com/chart/?symbol=BTCETH

https://www.tradingview.com/chart/?symbol=BITFINEX:BTCUSD