Topic: Daily vs Weekly chart: Bear market comparisons (Read 78 times)

Because the year after the ATHs in 2014 and 2018 price was a long way away from the 50 Day MA, so there was little to no confirmation of a bottom being formed on the Daily time-frame, even if support from the 200 WMA was already suggesting a low could be in on the weekly time-frame. This is why I'm analysing months after the lows back then, as it's the equivalent time-frame to now, 7 weeks after the $17.5K low.


It's true, it's only from 2 bear markets really, and could easily be considered a coincidence, even if price found support effectively 4 times from the 200 WMA. The comparison is more about how the daily chart looks in comparison to previous bottoms being formed in 2015 and 2019, where the 50 Day MA has played an important role in acting as resistance followed by support both times.

While it might not be obvious, a trend reversal from a bear market is effectively impossible until price moves above the 50 Day MA, as price can otherwise only reach the average price of the last 50 days.

Put of curiosity is there a reason you're comparing this to 2019/2015 and not 2018/2014 (the immediate year after the new aths/drops last time)?

It feels like there's not much data to go off about this current cycle though (just from those MAs) but it'll be interesting to see how it all goes and whether we do get a weekly close above that moving average.

The 200 week MA is known to be followed in a lot of charts as quite a strong support though and I think that'll still go higher (even if price remains more stable).

With price closing back above the 200 Week MA last week, many remain unconvinced about the current trend reversal. Despite closing multiple candles below this long-term MA in 2015, as well as falling 30% below this level in 2020, most appear understandably very sceptical that price will now find support back above this, despite other indicators suggesting the bottom is already in and the capitulation is over.



It therefore seems appropriate to see how this current consolidation at the lows compares to the 2019 rounding bottom. Price was rejected three times by the 50 Day MA (purple line) for over a month before finally turning it into support (with a close re-test) once it had flattened out (lost it's bearish bias from trending downwards), followed by spending another month of consolidation above this level prior to the trend reversal.



By comparison this year, price has already broken through this resistance level after it's second attempt. Although price hasn't yet confirmed this level as support, currently priced at $21.3K but due to rise in the coming days, it does confirm that the current bearish momentum of the bear market has passed as the MA has already flattened out, even if still lacking bullish confirmation of a trend reversal.



Personally I found this an interesting comparison as while the weekly chart still needs to confirm the 200 WMA as support, the daily chart looks stronger right now as it has already broken through it's key moving average that in 2019, as well as 2015, acted as strong resistance, with price finding support from this MA, as well as moving above it, being a crucial factor for a trend reversal. This should also act as a reminder that (again) breaking below $22K key support in order to re-test this important moving average, wouldn't invalidate the short-term bullish trend, but could in fact confirm it further (as was the case in 2015 and 2019).

This still isn't intended to imply the bottom is definitively in, even if I remain 80% confident this week, but that on the daily time-frame there is already some confirmation that a trend reversal is occurring.