Many people are asking the question: When will crypto winter end and the next bull run begin? Obviously, this is a difficult question to answer with any certainty. However, here at Chepicap we have assembled 4 signals that we need to see in the market before the next bull run begins. Where are we now relative to these signals? Let's find out.
1st signal: Double Bottom
Now, to be fair, a double bottom doesn't have to happen, but if we saw one it would be a good sign we have lost bearish momentum. Part of the reason it seems plausible that a double bottom could occur is that it has happened before in the previous market cycle, which looked a lot like this one.
Here we see the previous cycle from mid 2014 through early 2016.
As you can see on the first chart, the market originally bottomed in early 2015, then again around August of the same year. On the current chart, we see we recently bottomed near the end of 2018. Will there be another one? Well, this chart is giving us another signal that is repeating from the previous cycle too, and that's coming from the Moving Average.
2nd Signal: Bearish Crossover of the 50, 100 Week Moving Averages
Looking back at those charts, there's something else we can see that happened not long after the first bottom in 2015 and has just happened again. That is the bearish crossover of the 50 and 100 week Moving Averages (MA). In 2015, about 5 months after the first bottom, we see the 50 week MA cross below the 100 week. Though a bearish signal, it can also mean momentum has run out for the sellers. It may not be a coincidence then that we can see we just had another bearish MA crossover just a few weeks ago.
In the last cycle, the crossover occured about 5 months after the first bottom. This approximately fits with what we are seeing now in our current cycle. If history repeats itself, we could see the second bottom closer to the end of this year.
There is another signal that fits into this same framework, and it has to do with how Bitcoin relates to Litecoin.
3rd Signal: Litecoin leading Bitcoin out of the bear market
In a recent article we explored the possibility that Litecoin recently gave a signal that looks a lot like one it gave before the previous bull run. The analysis comes from a tweet put out by Coindesk Markets:
#litecoin bottomed out at roughly the same time as #bitcoin in 2015, but $LTC's trend became bullish well before $BTC/USD.— CoinDesk Markets (@CoinDeskMarkets) March 5, 2019
It looks like a similar development could be occurring now pic.twitter.com/fUBNbZq4FS
Looking at the chart, we see that in the last market cycle Litecoin was first to break out of the bear market, seemingly in anticipation of its own "halving" event. A halving is a regular event for Litecoin, Bitcoin and some others, in which the block reward is reduced by half. Now Litecoin has once again broken out of the bear trend before Bitcoin, and we are approximately the same distance from Litecoin's next halving. This could be another sign that history is repeating itself.
We can also see that Litecoins halving lines up approximately with the second bottom for Bitcoin in the previous market cycle. Again, if the pattern holds it would align nicely with our previous observation that the next bottom would come near the end of the year.
Now for our final signal, we need to look into Bitcoin's own halving event.
4th Signal: Bitcoin's halving event
Another chart we recently referenced shows Bitcoin's price history on a logarithmic scale and placed against the coin's own halving events.
This chart seems to show that at least for the last two market cycles (which is most of Bitcoin's life) the price seems to bottom about 1 year before a halving event, after which the bull run slowly starts to build for a year or two. Note again how the second bottom of the last cycle also fits neatly into this framework, coming about 1 year before the last halving. If this pattern also holds again then we could still expect to see a second bottom sometime in mid/late 2019, about 1 year before the next halving. This would roughly put the next bull run getting into full swing in late 2021/early 2022.
The fact that all these signals support each other is highly optimistic that there is something here. Looking at previous market movements is pretty much the best information a trader can work with. That all being said, none of this should be seen as investment advice and all readers should be aware that sometimes history doesn't repeat, and any sort of big news in the market could throw all technical analysis out the window.
In conclusion, if the previous trends repeat this cycle then it is likely we will still be seeing crypto winter for most of this year. Odds are good we have seen the bottom, but they are also good that we will touch on that bottom again. However, once we do, we may begin to see some growth, which should cause the weekly Moving Average to cross back over in a bull signal. Then if we can then see Litecoin follow a similar pattern to the one it displayed a few years ago and if Bitcoin follows in kind, the next bull run should be just around the corner! As always, stick here with Chepicap for all your price action related news!
Read more: 3 upcoming catalysts for a Bitcoin bull run
For more information on these signals, watch:
4 Signals the next Bitcoin bull run may start
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