No New Lows: “Parabolic” Bitcoin Indicator Could Suggest The Local Bottom Is In

When Bitcoin rallies, it historically has gone parabolic and blasted off to astronomical prices before each cycle peaks. Recently, rallies have been few and far between, cutting the price per coin down to around $33,000 at the local low.

The plummet, however, fell short of tagging a “parabolic” indicator and it could mean that the local bottom is in. Here is more about the Parabolic SAR, the potential signal, and other supporting evidence that the bottom might already be in.

Parabolic Uptrend Intact, Says Indicator With 95% Confidence Rate

Bitcoin price has repeatedly gone parabolic to conclude any major cycle peaks before entering a bear market. While the recent sentiment and price action across crypto has been deceptively bearish, there are plenty of signs that Bitcoin is still in a bull market.

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One of those signs not only suggests the uptrend is still in tact, but that the local bottom of the recent downtrend could very well be put in. That signal is the Parabolic SAR on monthly timeframes. The higher the timeframe, the more dominant the signal, and there are few as important intervals at the monthly.

Related Reading | Bitcoin Begins Bounce From 7-Year Bull Trend Line

During the month of January, Bitcoin price action stopped precariously at the Parabolic SAR indicator – leaving nothing but a wick right up against it remaining. When February opened, Bitcoin continued higher, forming a green candle and leaving three months of unexpected downtrend behind.

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As each month progresses, the Parabolic SAR moves up or downward along with price action. With Bitcoin price trading above the Parabolic SAR, up it went in February, meaning that the indicator will be touched if a retest of January’s lows occur. It also could mean that January’s lows are never revisited. Or at least not for some time.

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The downtrend stopped right at the Parabolic SAR | Source: BTCUSD on TradingView.com

Backing Up The Idea The Bitcoin Bottom Is In

The Parabolic SAR stands for “stop and reverse” and the indicator is designed to do just that: tell a trader when the trend has stopped, and reversed. It is so effective in this regard, that traders often place their stop loss directly above or below the SAR depending on the direction of price.

If the SAR is touched, it tells a trader that there is a strong probability the trend is over. If the SAR isn’t touched, traders move their trailing stop loss continuously just above or below it. The fact that Bitcoin price stopped short of the SAR on monthly timeframes could indicate that a major player is using the tool for a trailing stop loss, and could be interested in protecting that position.

Related Reading | Crypto Correlation: Comparing Bitcoin And The S&P 500 Flat Correction

Or of course, the tool is working exactly as J. Welles Wilder designed it to. Wilder also created other effective and commonly used technical analysis tools, such as the Relative Strength Index, Average Directional Index, and Average True Range.

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The middle-Bollinger Band and Ichimoku base line back up the SAR theory | Source: BTCUSD on TradingView.com

Although the Parabolic SAR is often considered a lagging indicator, over 17 years to research found that it had a 95% confidence rate. But if that still isn’t enough to potentially create more confidence after such a brutal selloff, the monthly Parabolic SAR also appears to coincide with the monthly Bollinger Bands basis line (left, middle band) and the Ichimoku base line (right, red line).

Is this enough to stave off a further breach of support by bears and lower prices? Only time will tell. But if no new lows are put in and the uptrend continues from here, will that increase your confidence rate in the Parabolic SAR?

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

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Bitcoin ATMs Shut Down In Singapore After MAS Curbs Crypto Advertising

Financial service regulator – Monetary Authority of Singapore has issued fresh guidelines to limit crypto trading by the public. It has also taken a firm stance and asked cryptocurrency companies to eschew advertising or showcasing their products to the general public. MAS substantiated their decision by stating reasons which were purely risk-oriented.

The guideline stated and clarified that Digital Payment Token service providers “should not portray the trading of DPTs cryptocurrencies in a manner that trivializes the high risks of trading in DPTs, and should not promote their DPT services in public areas in Singapore or through any other media directed at the general public in Singapore”. 

“Highly Risky And Not Suitable For The General Public”

The Central Bank affirmed that such services are “highly risky and not suitable for the general public”. It implied that the broadcasting of cryptocurrency through traditional media such as newspapers and magazines must also cease to exist. 

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On Tuesday, MAS declared that it would be outlawing crypto-to-cash terminals, thus, sealing all crypto ATMs in Singapore. Daenerys & Co,  which is one of the biggest crypto ATM operators with five crypto ATMs spread across the city had acted in accordance with the guidelines. Another rival ATM operator, Deodi also complied with the Central Bank’s order and ceased its only ATM. 

Related Reading | Intel To Present Low Voltage, Energy Efficient Bitcoin Mining Chip At Conference

This recent regulatory clamp from the MAS cropped up amidst the growing popularity of the blockchain industry with new investors joining the ecosystem each day. Although MAS quoted that “MAS strongly encourages the development of blockchain technology and innovative application of crypto tokens in value-adding use cases.”; the cryptocurrency market in Singapore continues to reel under a significant number of regulatory milestones.

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Recently, Coincub, a fintech start-up in one of their rankings, called Singapore the world’s most friendly cryptocurrency economy. Singapore in the past had been quite liberal in terms of cryptocurrency adoption with an undemanding and positive legislative environment. Currently, the reality looks quite different, so to say.

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Bitcoin's growth is concerning regulators | Source: BTCUSD on TradingView.com

MAS Believes Bitcoin ATMs Let People Trade “On Impulse”

MAS believes that ATMs facilitated a seamless and convenient transaction of cryptocurrencies such as Bitcoin and Ethereum. This could cause people to trade “on impulse”. This notion caused regulators to mandate the clampdown of ATMs all across the city.

In regards to crypto regulations, Singapore isn’t the only name on the list. In December 2021, Britain outlawed advertisements from seven such crypto firms as they were  “irresponsibly taking advantage of consumers’ inexperience and for failing to illustrate the risk of the investment”.

Spain had also led a crackdown on cryptocurrency promotions recently. Singapore’s regulatory escalation comes after Bitcoin’s prices nosedived almost 40% after BTC soared to new heights in November 2021. 

Related Reading | Green Energy: In NY, Bitcoin Mining Saved The Oldest Working Hydroelectric Plant

Cryptocurrency is not only a volatile asset but has also enabled a wide spectrum of fraud associated with digital assets. In recent times, cryptocurrency has facilitated money laundering and terrorism funding among other illegal activities.

“Digital payment token service providers in Singapore have to comply with requirements to mitigate such risks, including the need to carry out proper customer due diligence, conduct regular account reviews, and monitor and report suspicious transactions,” stated MAS spokesperson.

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Bitcoin Weekend Forecast: Cloudy With A Chance Of Reversal

Bitcoin price is at a pivotal zone, nearing a potential point of no return for bulls. However, the weekend forecast could suggest sunnier skies are in the future, so long as BTCUSD holds above the weekly Ichimoku cloud.

Here is a closer look at BTCUSD weekly timeframes “at a glance” using the Ichimoku Kinko Hyo.

BTCUSD_2022-01-14_10-15-34

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Bitcoin price is holding above the cloud | Source: BTCUSD on TradingView.com

Weekly Bitcoin Price Action At A Glance Using Ichimoku

Using nothing more than the naked Ichimoku chart above, BTCUSD weekly has touched and found support at the cloud – also called the Kumo.

The blue conversion line is above the maroon-colored base line, indicating the market is still bullish, but consolidating. A bullish trending market would see Bitcoin price trading above both lines.

Touching the cloud itself isn’t always significant. However, only weekly timeframes, retesting the same cloud is what kickstarted the bull run.

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BTCUSD_2022-01-14_10-20-13

Flipping the Ichimoku cloud started the bull run | Source: BTCUSD on TradingView.com

Losing the cloud would be substantial. It could mean the bull cycle has finished, or that extended consolidation is ahead. The last time the weekly cloud was lost was the Black Thursday collapse in March 2020.

The Ichimoku is among the few technical indicators that focus on both time and price. Tapping the cloud means that it is time to look for other signals for more confirmation.

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Three potential supporting reversal signals can be found | Source: BTCUSD on TradingView.com

With more technical indicators turned on, things get a lot more interesting. The TD Sequential market timing indicator has triggered a perfected buy setup, just as Bitcoin touches the cloud.

Sunday night’s weekly close could very well remain near current levels to end with a doji. How bulls react in the following week would be telling.

Bullish Take | The Hidden Bitcoin Trend Line That Could Save The Bull Run

A green up candle to above $47K would break through a local downtrend line and put a morning star Japanese candlestick pattern in play. It is worth noting, however, that the last potential weekly morning star setup failed. But such signals are only confirmed in hindsight.

At the same time, weekly Stochastic is exhibiting a bullish divergence. A bullish crossover is also nearing while at a reading that historically put in more significant bottoms than this.

What To Expect This Weekend Ahead of The BTCUSD Weekly Close

A doji candle signals indecision and come at the end of a trend, or at a pause before continuation. The fear in the market has left bulls weak and bull salivating, but neither have been able to make a major difference in the last five days.

The weekend forecast suggests more of the same level, with bulls needing to defend $42,000 and lower. Fear will likely keep bulls at bay until after the weekly close, when confidence returns and there is possibility of a morning star reversal.

Bearish Take | Bitcoin Death Cross 2022: What You Need To Know About The Deadly Signal

If the doji candle were to hint at continuation instead of reversal – the next logical target would be the bottom of the Ichimoku cloud at around $37,000.

Danger of more downside than that still exists. Bitcoin price just had a daily death cross which could have apocalyptic implications. Losing the Ichimoku cloud completely might indicate that the bull cycle has concluded for the time being. Reclaiming the cloud would be the first sign the bull run is back on.

Whatever you do, watch the clouds closely over the weekend.

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

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Bitcoin Death Cross 2022: What You Need To Know About The Deadly Signal

All across crypto, fear is in the air. Not only is the market shaken from the recent downtrend, but there’s an extra layer of doom and gloom due to an impending “death cross” in Bitcoin.

Learn all about the ominous sounding crossover of two commonly watched moving averages, what the signal could mean, and how Bitcoin price has reacted in the past.

BTCUSD_2022-01-12_10-35-43

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The "death cross" is nigh | Source: BTCUSD on TradingView.com

Does The Bitcoin Death Cross Mean Doom And Gloom For Crypto?

Bitcoin price on daily BTCUSD charts is only days away from completing a “death cross.” According to Investopedia, “a death cross is a technical chart pattern indicating the potential for a major sell-off.” It occurs when a short-term moving average (in this case the 50-day MA) crosses below a long-term moving average (the 200-day MA).

The signal tells investors that the asset’s growth has slowed and is showing potential of a bear trend. Long-term price depreciation is possible. However, in Bitcoin, things don’t always behave the way they should.

Related Reading | 2022: The Year The Secular Bitcoin Bull Run Could End

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Across eight total death crosses in the first ever cryptocurrency, the average drop within a month from the cross is a mere 25% (h/t Dan via TonyTradesBTC) – puny by crypto standards.

The opposite signal, golden crosses, also don’t always have a positive impact, either. In fact, Bitcoin price is lower now today than it was when the last golden cross triggered.

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The history of death and golden crosses in emoji | Source: BTCUSD on TradingView.com

Data Shows Whether Or Not You Should Fear The Reaper

Such crossovers, are often used to confuse the market during consolidation phases. Ahead of the 2020 bull breakout, there were two death crosses and two golden crosses. One notable death cross in October 2019 resulted in a 42% pump the day prior signal.

Despite the strength, price action was rejected back down to new lows, only to golden cross, death cross, then golden cross again. Ahead of the fabled 2016-2017 bull run, there was also a similar fakeout – depicted in the green box.

Related Reading | The Hidden Bitcoin Trend Line That Could Save The Bull Run

Prior to the 2014-2015 bear market, however, there was a death cross, golden cross, back into a death cross fakeout that closely mimics the situation brewing in Bitcoin right now in the red box.

Another such example could result in a renewed bear phase. But the data otherwise shows that the “death cross” is not a reaper you need to fear.

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

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The Hidden Bitcoin Trend Line That Could Save The Bull Run

Today, Bitcoin price sank below $40,000 for the first time since September – a price more than 50% lower than what the market was anticipating this time of year.

While the downside has been impossible to ignore, the latest sweep of lows has resulted in a touch of a trend line dating back to the bear market bottom that could keep the bull market intact a bit longer.

Technical Analysis And Framing The Importance Of Trend Lines

When it comes to technical analysis in Bitcoin, trend lines always matter. When such lines hold, it is a sign to the market that it is time to reverse. When they give way, the resulting breakdown and panic is usually dramatic.

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For example, losing the horizontal support line of $6,000 in late 2018 immediately resulted in a plunge to $3,000. Once there, the bear market bottom was put in.

Related Reading | 2022: The Year The Secular Bitcoin Bull Run Could End

It was beginning at that initial bounce that restored hope in Bitcoin, that yet another trend line started. Rather than a trend line drawn across price peaks or troughs, this trend line is drawn across extreme oversold readings on the daily Relative Strength Index.

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BTCUSD_2022-01-10_09-28-51

A long-term RSI trend line could cause a bounce | Source: BTCUSD on TradingView.com

Now Or Never: Bitcoin Bull Run RSI Trend Line Must Hold

As Bitcoin price swept below $40,000 on BTCUSD daily charts, the Relative Strength Index tapped a long-term trend line. The line itself has withstood the bear market bottom, Black Thursday, and the 2021 selloff down to $28K.

Does this latest move down have enough momentum to break through the support line? Or will it hold once again? The reading alone on the RSI suggests conditions are highly oversold – the fourth most extreme since the bear market bottom.

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Fourth time is the charm? | Source: BTCUSD on TradingView.com

During the last bull market, there were four total touches of the daily RSI trend line. The fourth was the final touch before the peak of the bull market (green dotted line).

Related Reading | Blast From The Past Bitcoin Fractal Could Suggest A Record Reversal Is Near

The same trend line, once breached, is what led to Bitcoin falling sharply from $20K to under $6,000 in less than one month in early 2018 and kicked off the bear market (red dotted line).

Bitcoin is once again at the trend line. Will the fourth tap prepare the market for liftoff, or will the line break down and a new bear phase begin? It could be now or never for Bitcoin bulls.

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

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Blast From The Past Bitcoin Fractal Could Suggest A Record Reversal Is Near

Mark Twain said that history doesn’t repeat, but it often rhymes. Such a scenario could be about to play out in Bitcoin, according to a potential fractal that mimics the setup before a previous record-breaking rally.

While the conditions aren’t quite the same for an exact repeat, there could be enough for the price action now and then to rhyme just enough. Let’s take a closer look.

Record-Breaking Bitcoin Price Fractal Found, But Is It Valid?

Markets are cyclical and patterns repeat in those markets so often, they can be used to predict the future. Most of the statistically proven technical patterns include some type of geometric shape such as triangles and rectangles.

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But not all setups are so clear. Repeating patterns called fractals can appear, mimicking the price action of past moments. When fractals appear, they aren’t a perfect repeat of the situation before, but can yield similar results.

Related Reading | Could Kazakhstan Turmoil Cause Another Bitcoin Hash Crash?

The fractal in question is a setup from October 25, 2019 – in the past dubbed the “Xi pump” or “China pump.” Bitcoin price had swept support after more than a month of grinding against it, only to sharply reverse.

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Not only did price action reverse, the resulting short squeeze and FOMO led to a record-breaking 44% climb in a matter of 48 to 72 hours. It was the third-largest single-day rise in the cryptocurrency’s history.

BTCUSD_2022-01-06_14-04-02

Price action mimics a fractal from October 2019 | Source: BTCUSD on TradingView.com

Will The Death Cross Breathe New Life Into Crypto Bulls?

The fractal above is eerily similar to the price action during the October 2019 downtrend. The peaks and troughs match well enough, as pictured above.

What is more potentially telling, is the fact the same setup is brewing when Bollinger Bands are turned on. 12-hour BTCUSD timeframes show a similar pattern, then a very similar close outside of the lower Bollinger Band. After a pause and a pair of doji, Bitcoin price reversed and reversed hard.

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The Bollinger Bands could snap BTC back to $60K | Source: BTCUSD on TradingView.com

If the pattern were to repeat or even rhyme, there is potential for a historic, record-breaking reversal. The last time the setup happened in October 2019, there was a 44% climb in the days that followed.

Related Reading | 2022: The Year The Secular Bitcoin Bull Run Could End

Another 44% climb would take Bitcoin back above $61,000 per coin and it could happen in just days. Fractals, however, aren’t valid, statistically proven patterns with any probability behind them. They simply can appear to look like past price action, but completely fail to yield the same results.

BTCUSD_2022-01-06_15-03-58

Could Bitcoin pump into the death cross again? | Source: BTCUSD on TradingView.com

Finally, there is a looming “death cross” on the daily, which also appeared around the same time as the so-called China pump. A death cross happens when the a short-term moving average – the 50-day MA – crosses below a long-term moving average – the 200-day MA.

Despite all the similarities, the fractal above should be taken with a grain of salt – salt that may end up in the wounds of bears should this pattern play out.

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

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A Crypto Christmas Miracle? Bitcoin Signal Suggests A Bottom Is Near

During no other time of the year are humans more open to the idea of miracles than now. But what about a crypto Christmas miracle for Bitcoin?

Rather than the miracle being the premise for a holiday flick, it is possible that the appearance of a backtestable technical signal puts in a miracle-esque bottom for the cryptocurrency market.

More Credence For A Santa Claus Rally In Crypto

Dozens of Hallmark-style holiday movies include the world “miracle” in their title. The idea that Santa Claus could hit the homes of children across the entire globe in one night demonstrates the type of hopeful sentiment that can build this time of year.

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Related Reading | Could Bitcoin Benefit From A Santa Claus Rally?

Across the cryptocurrency market, investors got the equivalent of coal for Christmas – that is unless a miracle happens. That miracle has a higher than average probability of happening this holiday, according to the Fisher Transform technical indicator on BTCUSD 3-day timeframes.

This technical indicator has only shown such an extreme deviation two other times throughout its history – and when you read at what prices this signal triggered at previously, you won’t help but become more hopeful for a Santa Claus rally over the next several days.

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bitcoin Christmas miracle crypto

Could a Christmas miracle make investors merry? | Source: BTCUSD on TradingView.com

The Most Extreme Bitcoin Bottom Signal Is Back For Christmas

The Fisher Transform is a technical indicator that was created by John F. Ehlers and, according to Investopedia, “converts prices into a Gaussian normal distribution.” Doing so makes spotting turning points a lot easier. Both extreme readings in standard deviation and the signal itself changing direction present a higher than normal probability point of reversal.

When it comes to objective technical analysis, few technical indicators supply such regularly backtestable results as the Fisher Transform. The version of the Fisher Transform pictured above and below is a custom tool designed by Moe_mentum dubbed the iFish Smooth & Divergence, available on a two-week trial basis or $525 for lifetime use.

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Could this signal be another gift for Bitcoin holders? | Source: BTCUSD on TradingView.com

On 3-day BTCUSD charts, the Fisher Transform is showing a potential reversal through turning around at the -2.0 deviation – a point of extremes reached only two other times prior.

The first of the two instances was in October 2011 when Bitcoin was trading at around two bucks per coin. The second was at the bear market bottom in December 2018. Now, some three years later, the extreme level has been reached again, just as the indicator starts turning around.

Related Reading | Bitcoin Falls Flat: Examining A Rare Bull Market Corrective Pattern

The Fisher Transform is an unbounded indicator, meaning that it could very well reverse again and continue to a deeper deviation and extreme. However, doing so would only further increase the likelihood of a reversal further. This makes the Fisher Transform a helpful tool for those who trade using a “mean reversion strategy” and attempt to profit from when prices move to unusual extremes.

Bitcoin price could still make another low while the Fisher Transform fails to do so. At that point, a bullish divergence would be possible and another buy signal potentially generated – again improving the chances of a positive outcome.

Investopedia warns that the potentially lagging indicator could have several limitations. For example, “asset prices are not normally distributed, therefore attempts to normalize prices could be inherently flawed and may not produce reliable signals.”

However, the Fisher Transform remains among the most statistically reliable though backtesting of data, especially when combined with other tools for confirmation. And these statistics show a Christmas crypto miracle could be on the way.

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

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Could Bitcoin Benefit From A Santa Claus Rally?

CNBC personality Jim Cramer has been pushing the possibility of a so-called “Santa Claus rally” across the stock market. But could this holiday-related trend have an impact on Bitcoin and cryptocurrencies?

Mad Money Host Calls For “Santa Claus Rally”

Bitcoin has taken a beating, down substantially from what most of its backers believed the year would be closing at. The stock-to-flow model was predicting anywhere between $100,000 to $288,000 per coin, but instead the top cryptocurrency by market cap is below $50,000 or around half of the lower of the two targets.

Related Reading | Could An Elon Musk Time Magazine Cover Predict The Crypto Cycle Peak?

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But the year isn’t yet over, and a potential Santa Claus rally narrative is slowly spreading across the world of stocks. CNBC Mad Money host Jim Cramer is giving the idea heavy press. First, he tweeted explaining that today is the day it would normally start.

On Squawk Box, Cramer later revealed that if “you bought today and you just held on even for six days, you made money almost every single year.”

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According to Investopedia, a Santa Claus rally “describes a sustained increase in the stock market that occurs in the last week of December through the first two trading days in January.”

Statistics show that there is a remarkably higher probability of strong performance during these key dates based on the S&P 500. Such rallies are retail driven, and occur for various reasons which include:

  • Increased investor enthusiasm around the holidays
  • A low volume environment due to holidays and vacations
  • More sophisticated short-sellers are on vacation
  • The end of tax-loss harvesting by institutional or wealthy investors

But does such a phenomenon work for Bitcoin and crypto?

BTCUSD_2021-12-21_15-42-33

Ho ho how much could crypto climb? | Source: BTCUSD on TradingView.com

Will Bitcoin Climb This Christmas Into The New Year?

Reviewing past statistics related to Bitcoin price action around the last week of December into the first two trading days of January, data shows there is a lower probability of a Santa Claus rally in crypto than in stocks.

Only four years during such timeframe have been positive for Bitcoin, with the most recent occurring last year. With far less data available than in the S&P 500, anything is still possible when it comes to speculative digital assets.

Related Reading | Bitcoin Falls Flat: Examining A Rare Bull Market Corrective Pattern

Other seasonal type data related to this very day might prove to be more profitable. Today also is the Winter solstice, which in the past has been in close proximity to either a top, bottom, or a break of all-time high.

BTCUSD_2021-12-21_16-45-44

The Winter Solstice and Fibonacci | Source: BTCUSD on TradingView.com

With this Winter solstice having failed to produce the peak of a rally, it could – like it has in the past – instead put in a short-term bottom that runs until the next equinox. And its possible that it starts with a Santa Claus rally.

Crypto is notoriously low volume compared to other markets, especially during holidays. The presence of institutional tax loss harvesting and more advanced short hedge positions could have kept Bitcoin price down during the December month, but with that out of the way, retail could push prices up in the near term.

However, according to the person who first mentioned a Santa Claus rally in The Stock Trader’s Almanac in 1972, Yale Hirsch, the rally itself isn’t what’s important. It is what arrives in the year that follows that matters.

“What’s important is not to catch this little rally but to use it as indication for what may happen in the coming year,” he said, calling it “an early indicator for the year to come.”

Hirsch’s father even came up with a phrase to help remember: “If Santa clause should fail to call, bears may come to Broad and Wall.”

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

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This Bitcoin Morning Star Could Brighten The Bullish Narrative In A Flash

Things are looking dark across the cryptocurrency market, especially for Bitcoin. But a potential reversal pattern called Morning Star could bring a return to the bullish narrative faster than the speed of light. Here is a closer look at the possible Japanese candlestick reversal pattern and the conditions necessary for confirmation.

Crypto Bloodbath: It’s Always Darkest Before The Dawn

Although the origin source is uncertain, 17th century English theologian and historian Thomas Fuller is credited with the quote, “it’s always darkest before the dawn.”

Cryptocurrency markets, and Bitcoin in general, have shown time and time again that when things seem at their worst, it is usually the best time to buy for the largest return on investment. It is what contrarian phrases like “buy the blood in the streets” and “be greedy when others are fearful” are meant to convey.

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Related Reading | Bitcoin Bottom Signal From Bear Market, Black Thursday Could Save The Bull Run

Things might seem bleak for Bitcoin considering a 38% correction from highs and a high-risk macro environment. But just as Fuller’s quote would indicate, the potential for a reversal is possibly here and it could begin with the dawn of a Morning Star pattern.

bitcoin BTCUSD_2021-12-15_11-31-02

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Bitcoin price must close $53,500 for conditions to be met  | Source: BTCUSD on TradingView.com

The Level Bitcoin Must Reclaim To Confirm A Morning Star Reversal

On weekly Bitcoin charts, the leading cryptocurrency by market cap can be seen with a massive down move and corresponding red candle, followed by a green doji indicating a pause in the trend – or a period of indecision. Doji appear ahead of continuation, or a potential reversal.

If bulls can close the current weekly candle with an aggressive move of a similar magnitude, the doji will be the turning point of a Morning Star reversal pattern.

Related Reading | Learn More About Japanese Candlesticks Patterns In Bitcoin

A Morning Star is a bullish reversal pattern based on Japanese candlestick formation. For the pattern to be valid, this weekly Bitcoin candle must close above $53,500 or at least 50% of the red candle down. Without those conditions met, bears could continue to control crypto market price action.

Morning Star reversals have an accuracy of breaking bullish 78% of the time and according to Thomas Bulkowski, ranks 6th out of 103 different candlestick patterns in terms of overall performance.

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

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Could An Elon Musk Time Magazine Cover Predict The Crypto Cycle Peak?

The crypto market is in turmoil – a major change from the exuberance that kickstarted the year. One of the most important figures responsible for the euphoria in Q1, was none other than the self-proclaimed Dogefather, Elon Musk. His sudden love affair with Bitcoin and other crypto assets send valuations flying, and once he changed his tune, so did the trend.

Now, the Tesla and Space X frontman is also made it on the front cover of Time Magazine as the elusive person of the year. But it could it be an omen that the end of the crypto bull cycle is near – or potentially already here.

Time Magazine Picks Elon Musk As Person Of The Year

Bitcoin and cryptocurrencies have been compared to all kinds of bubbles, ranging from tulip mania to the dot com boom.

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While it can be argued that like tech stocks from two decades because crypto assets make a comeback, they aren’t actually in a bubble at all, a more dramatic ‘pop’ could be on the way, according to the unfortunate timing of the Elon Musk Time Magazine cover.

Related Reading | Bitcoin “Speculative Chart” Suggests Crypto To Soon Blast off

Time Magazine selected Musk as the 2021 person of the year, which in the past has gone to names like Kamala Harris, Mark Zuckerberg, Barack Obama, and Jeff Bezos.

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In fact, it’s the Amazon CEO that coincidentally could be a sign that the crypto cycle peak is near.

TOTAL_2021-12-13_12-30-13

The Jeff Bezos cover was the dot com bubble peak, what about Elon?  | Source: TOTAL on TradingView.com

Dot Com Bubble: A Prelude To The Crypto Cycle Peak

Back in December of 1999, Amazon founder Jeff Bezos was chosen as the Time Magazine person of the year. Three months later in March of the 2000, the dot com bubble popped.

Comparing the famous internet-focused stock market bubble with the total crypto market cap provides a similar trajectory, that may or may not have run out of steam. Even if like the dot com bubble the current level in December were to hold, a peak just three months away in March 2021 would lead to the worst correction that Bitcoin and the rest of the cryptocurrency market has ever seen.

Related Reading | Bitcoin Bottom Signal From Bear Market, Black Thursday Could Save The Bull Run

But that’s only if the peak isn’t already in. Currently, Bitcoin is flirting with continuation to the downside at about $46,000 per coin. The chart above also demonstrates roughly how much more ground could be covered if the level does indeed hold.

Bull markets tend to end in euphoria, and with the market in full blown fear, the sentiment doesn’t quite match. The so-called “magazine cover” indicator has a delayed effect, because the content goes into production months ahead of the publishing date. Could this mean that the peak in April while Musk was making headlines, truly was the euphoric peak? Or has the market not quite seen anything yet in terms of what euphoria could look like?

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Featured image from iStockPhoto, Charts from TradingView.com

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