Top 3 Indicators to Identify the End of a Bear Market | And More in This Weeks Crypto Update.
- Basic Attention Token is Entering a Strong Seasonal Phase
- Shiba Inu Extended Bull Flag Calls for Imminent Breakout
- Top 3 Indicators to Identify the End of a Bear Market
Basic Attention Token is Entering a Strong Seasonal Phase
Basic Attention Token (BAT) is entering a strong seasonal phase that can lead to topping prices by the end of July and the beginning of August. The seasonal tendency simply shows the price pattern of BAT to rise or fall in the course of a calendar year.
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BAT Seasonal Pattern
Historically, the months that have been more profitable for BAT have been January, April, July and November. The chart also shows that these seasonally strong phases in BAT’s price have led to the cryptocurrency topping out.
It’s also interesting to note that January, April and November were the critical months when BAT’s price printed a major high.
While this is an excellent seasonal pattern for BAT’s price, traders should also be aware that we will reach a swing high.
The area between $0.40 and $0.50 is a strong pivot point that acted in the past as both resistance and support.
RSI Indicator
In terms of the weekly momentum readings, we have bottomed exactly near the previous two lowest RSI readings near the 35 level. However, since we’re hovering around the 50 mid-level, we can expect more consolidation.
Remember that the seasonal pattern might not always repeat, but they are a pretty good indicator of telling us what might lay ahead.
Shiba Inu Extended Bull Flag Calls for Imminent Breakout
Shiba Inu (SHIBA) has been consolidating for the past two weeks with no clear direction. However, the price action is developing a bullish flag formation which calls for a move higher if confirmed.
Bullish Flag Pattern
In a bull flag scenario, we have a period of consolidation that usually calls for the continuation of the price movement prior to the flag formation. The flag consolidation was established roughly between the $0.0000121 resistance level and $0.0000095 support level.
The bullish flag formation is only confirmed once the SHIBA price breaks above the upper horizontal resistance level. Usually, the subsequent rally is the same price length as the flagpole. If we project to the upside the same price movement, SHIBA can go as high as $0.00002.
This level is also significant because it aligns with the 200-day simple moving average, which the price might want to retest.
What is a Bull Flag?
A bull flag is a technical pattern that can be found on a price chart of an asset. It resembles a flag on a pole and is considered a continuation pattern, meaning that it typically occurs during an uptrend and signals that the trend will continue. The breakout from the bull flag pattern often happens very quickly, which is why many traders watch for this pattern.
RSI Oscillator
The Relative Strength Index (RSI) also appears to hold above the 50 mid-level signaling bullish momentum. At the same time, the Chaikin Money Flow (CMF), which can help us monitor the accumulation-distribution over a set period of time, is above the zero level — meaning there is more buying pressure.
What is a RSI Oscillator?
An RSI oscillator is a technical indicator that measures the momentum of a stock price. It is used to identify potential turning points in the market. The indicator is based on the difference between the average price of a stock over a certain period of time and the current price. If the current price is higher than the average price, it indicates that the stock is in an uptrend. If the current price is lower than the average price, it indicates that the stock is in a downtrend.
Looking forward: While the bull flag pattern is not yet confirmed, a break to the downside can invalidate the pattern, and the bears may try to challenge the current swing low around the $0.000007 level.
Top 3 Indicators to Identify the End of a Bear Market
The crypto market has gone through several major bear markets in its history, and each time it emerged stronger. To identify the signals of change better in the current bear market. We need to look at the same technical indicators that were the most accurate in the previous bearish cycle to predict price bottoms.
#1 200-Day Simple Moving Average
The 200-day simple moving average is widely the most important moving average used by investors and traders around the world. A daily break and close above the 200-day SMA often signals that the bearish trend has ended. The more time the price of an asset remains above the 200-day SMA, the stronger the signal is.
#2 RSI Oscillator
The Relative Strength Index (RSI) is another useful technical indicator that can help investors assess the buying and selling pressure. Usually, the RSI reversal signals are more powerful on the longer time frames.
For a more conservative approach, a break in weekly RSI above the 50 mid-level can confirm the end of a bear market.
#3 Moving Average Multiplier
Another bear market bottom indicator is the use of the 4-year SMA, which tracks the 4-year halving cycle. Crypto investors are better off using the 48-period SMA (4 x 12 months) applied on the monthly chart. Notably, every time Bitcoin’s price broke below the 48-SMA and then broke above the SMA, it signaled the end of the bear market.
While it’s tough to pinpoint exactly when the bear market will end, studying the previous bearish cycles and price bottoms, we can better assess when the current bearish cycle will end.
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