Price behavior suggests we are half way this bull market cycle
Market tops are typically reached when the share of bull days gets to about 30%. We are currently at...
Bitcoin’s price has decreased as much as 54% since its April 14 ATH. Is this signaling the current bull market cycle has come or is coming to an end? How can we know where we are in the cycle? Let’s use price behavior analysis to assess this.
For a more detailed explanation of the bitcoin price behavior model you can go see my article “Categorizing bitcoin price behavior” here.
We are half way this bull market cycle.
The chart below shows bitcoin’s price by type of day (bull, reversal, normal, etc) and the smaller charts the share for each type of day in the past 200 days (200-day moving average).
We can see that market tops are typically reached when the share of bull days (red line chart, cluster #1) gets to about 30% of days. We are currently at 15%, or half way the bull market cycle according to this indicator. The same analysis can be done by looking at normal days (orange line chart, cluster #3). Normal days typically decrease below 60% when the top is near, were are at 72% currently.
Of course there will be intermediate tops in every bull cycle.
To assess this we can look at the same type of charts but using a shorter time frame for the share of type of days, a month in this case (30-day moving average).
Under this indicators, when bull days trend towards 40%, that could be the signal of an intermediate top. For normal days the signal is a downward trend to or below 40%. See charts below.
Current market cycle has been more bullish so far.
Price behavior can also tell us if a market cycle is more or less bullish than previous cycles in terms of number of days. The chart below shows the number of bullish days by price epoch or market cycle. So far, the cycle we’re in has had more bullish days than the previous one, 36 days vs 29 respectively. However, epoch 1 market cycle has been the most bullish, with 136 bullish days at the same time in the cycle.
Conclusions
According to bitcoin’s price behavior: 1. we are half the current bull market cycle, 2. there will be further intermediate tops, and 3. this cycle has been more bullish so far than the previous one.