Until now, there have been three major Bitcoin corrections. They began in June 2011, November 2013, and December 2017. Numerous cryptocurrency traders use these as references for future price movements.
There have been several similarities between the 2014 correction and the current one — leading many people to believe that the absolute low has been reached at $3200 in December 2018.
Cryptocurrency analyst @davthewave claims that the current correction has been weaker than 2014 one. He did so by noting the difference in the movement in the yearly MAs — most notably, the one, two and three-year moving averages.
Moving Average Similarities
A number of indicators and methods can be used to compare movements — one of the most common being moving averages (MA). The relationship between them and price can be crucial in determining the direction and the strength of the underlying trend.Looking at the 2014 correction, the price and MA movements went as follows:- A bearish cross between the 1- and 2-year MAs transpired in March 2015. The price was trading below all three MAs at the current time.
- Afterward, a bearish cross between the 1- and 3-year MAs followed in July 2015 — right before the price touched the support line.
- Afterward, the Bitcoin price swiftly moved above the MAs and used them as support. Until the current correction, the price did not trade below the MAs or the support line. A bullish cross between the aforementioned MAs transpired in May 2016.
RSI Similarities
Another similarity that can help us predict when that bullish cross will occur is given by the RSI.
It reached identical values of 43 in January 2015 and 2019.
After January 2015, it reached a higher low in October 2015 before moving upward and creating a bullish cross.
If the movement after January 2019 takes the same amount of time, the price should make a higher low this month — reaching the support line and moving upward and creating a bullish cross. This fits with the hypothesis laid out in the previous section and our long-term analysis.
Do you think we have finished the current Bitcoin price correction? If not, where will the price make a low? Let us know your thoughts in the comments below.