Bitcoin (BTC) Has Bottomed The Same Way It Had Topped In 2017-18

Bitcoin (BTC) Has Bottomed The Same Way It Had Topped In 2017-18

Bitcoin (BTC) has bottomed out in the same way it had topped. If we look at the BTC/USD chart on a regular scale to try to find the bottom, our bearish biases get in the way considering we have been through an extensive bear trend. However, if we invert the scale and then look at the chart, we see what the above daily chart for BTC/USD shows. On this chart, the price decreases to the upside and increases to the downside. Looking at this chart, it is not difficult to say whether you would want to long or short it. The double top is clearly visible and it is not hard to see that the price would now have to fall below the 21 Day EMA to begin its formal downtrend.

As we are looking at this chart upside down, this means that BTC/USD will have to get above the 21 Day EMA to formally begin its bullish cycle. The price is incredibly close to the 21 Day EMA and it would not take much to see it breaking past it to finally pave way for that trend change that we have long been anticipating. The type of setup that we see on the inverted BTC/USD chart has been once before in 2017-18 when Bitcoin (BTC) topped out. While it is often easier for professional traders to find a top as they are always skeptical, it is hard for them to find a bottom for the very same reason. Their skepticism gets in the way and they are biased to believe that the price could drop a lot further even when it has already bottomed.

The daily chart seen above is from 2017-18 when Bitcoin (BTC) topped out after an aggressive rally. As we can see, both the charts look quite similar. There is one higher top followed by a lower top on both the charts. This chart for BTC/USD shows that when the price broke below and closed below the 21 Day EMA for the second time, we formally entered a bear trend. Similarly, if we look at the first chart, we can see that the price has already broken and closed once below the 21 Day EMA on the inverted BTC/USD chart but only when it does that for the second time is when we will formally enter the bear trend on the inverted BTC/USD. In other words, that is when we will see a bull trend on a regular BTC/USD chart.

A lot of people like to complicate things for themselves by looking at complex indicators to find tops and bottoms or use complicated calculations. While all that may be helpful to you as an investor, you have to see what kind of tools and resources the average investors have at their disposal and what they are thinking at the moment. While complex indicators and tools may be of great use to analyze trends and patterns short term, the big picture is far simpler and straightforward for anyone with a keen eye to observe.

Investment Disclaimer
Related Topics: