On the evening of October 16th, Cointelgraph released an error message, causing the price of Bitcoin to rise sharply, breaking through $30000 at one point. Subsequently, the market quickly fell by 10%, and the sharp fluctuations in these four hours actually set a record high
On the evening of October 16th, Cointelgraph released an error message, causing the price of Bitcoin to rise sharply, breaking through $30000 at one point. Subsequently, the market quickly fell by 10%, and the sharp fluctuations in these four hours actually set a record high.
This incident clarifies an important fact:After experiencing a relatively long bear market, the liquidity of the market has been quite depleted, which also confirms the SEC's view that 'currency markets are very easy to manipulate'.
In addition, this also indicates that the entire market is eager for the arrival of a bull market, and whether ETFs are approved has become a key factor in measuring the transition between bull and bear markets in the minds of retail investors and giant whales.
However, relying solely on one piece of news to determine whether a bull or bear market has arrived is clearly too subjective.
Here, Guage will introduce some famous and reliable bull and bear market conversion indicators to comprehensively evaluate market trends.
1. Bitcoin Rainbow Chart
The purpose of the Bitcoin Rainbow Graph is to use logarithmic regression to track the historical performance of Bitcoin prices over time.
It divides the price range of Bitcoin into nine different color ranges. The lowest blue area indicates that BTC may be underestimated at present, while the highest red area indicates that the price may have reached the peak of the foam, accompanied by high risks.
In the previous blockchain market cycle, it predicted the turning points of Bitcoin prices with astonishing accuracy.
At present, this indicator is at the bottom of the rainbow, which is the blue range, indicating a relatively low price and reflecting the pessimistic sentiment of the market compared to the special currency.
Therefore, this may be a suitable time to start placing or building positions. It should be noted that there are no indicators that can accurately predict the bottom of the market, and market conditions will constantly change, and the color of the rainbow chart will also be adjusted accordingly.
2. Ahr999 indicator
This indicator was created by Weibo user Ahr999, commonly known as the Nine Gods.
Nine Gods is a Bitcoin believer who advocates hoarding coins to become wealthy, believing that in the near future, Bitcoin will become a higher quality asset than gold.
He established a simple and feasible model. This model includes two core elements. The first is the fitting of the historical price of the comparison coin, which indicates the future price trend; The second is the 200 day fixed investment cost, which reflects the comparison between the current cost of warehouse construction and history.
When the ahr999 index< 0.45, you can copy the bottom;
When ahr999 is between 0.45 and 1.2, it is suitable for fixed casting;
When ahr999> 1.2, so the currency price is already quite high and not suitable for operation.
At present, the parameter of Ahr999 is 0.4667, indicating favorable market conditions, and investors can consider participating in the fixed position investment plan.
3. The proportion of non current supply of Bitcoin for more than 1 year
This indicator reveals the behavioral characteristics of long-term holders in the Bitcoin market, with a particular focus on those parts of the Bitcoin supply that have been held for more than one year but have not yet flowed.
In a bull market, as the price of Bitcoin increases, the proportion of Bitcoin that has not been liquid for more than a year usually decreases, as some long-term holders tend to sell at high prices for profit, resulting in this portion of Bitcoin no longer being considered illiquid for more than a year.
When a bear market falls, this proportion usually rises because fewer holders sell Bitcoin during low prices.
Therefore, the trend change of this proportion is closely related to the market cycle, providing us with a powerful tool to judge market psychology and trends.
At present, we can see that they seem to exhibit a parallel relationship.
This indicates that there are currently no obvious signs of a bull market in the market based on this on chain movement indicator.
So although the Bitcoin market remains stable, it may take more time and momentum to trigger a clear upward trend.
4. Changes in realized profit/loss ratio
This indicator provides important data on market conditions by comparing the ratio of total realized profits to total realized losses on the Bitcoin network.
If the 30 day moving average realized profit/loss ratio exceeds 1, it means that the realized profits in the past month have exceeded the realized losses.
This situation indicates that investors who previously held loss positions may begin to feel overwhelmed and unable to tolerate further losses, so they choose to sell their Bitcoin. Meanwhile, the new demand side may be sufficient to absorb the profits gained from selling Bitcoin.
It is worth noting that the realized profit/loss ratio has exceeded 1, which means that the market bottom may have been determined, providing investors with a relatively clear investment signal.
In this situation, gradually building positions may be a wise strategy, as the market is undergoing a positive transformation.
Guage believes that judging whether the entire market is about to enter a bull market actually requires a comprehensive and comprehensive evaluation, and cannot rely solely on a single or a few indicators.
Taking into account the above indicators, we can come up with a more comprehensive strategy, which can build positions during the gradual upward trend of the market, while also adopting a diversified fixed investment strategy for long-term holding and flexibly waiting for market conditions to become clearer before increasing positions.
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