Viewpoint: The market may start an upward trend in the next month

Author: Riyue Xiaochu Source: @riyuexiaochu

The market may start an upward trend in the next month. Considering that the time overlaps with the bull market, this upward trend is likely to be a bull market.

But please note that the market is a continuous process, not a one-step process.

1 The market has met the "falling long enough and falling too much"

The source of an upward trend is enough decline. Simply put, the market is a decline, and it starts to rise after the bottom is built. From the perspective of the decline, BTC has fallen from a high of 73,000 to a low of 53,000, with a decline of 27.4%. After 21 years, due to the market's consistent bull market expectations, the decline of BTC adjustment will not be as large as before. For example, in the second half of 2023, BTC only fell by 21%. From the perspective of time, from March to July, the adjustment time reached 4 months. Although it is shorter than before, it basically meets the requirement of sufficient time for decline.

Not to mention the altcoins, the decline is generally more than 80%.

2 Technical indicators show bottom signals

First, at the 53,000 position in July, RSI showed a daily oversold bottom divergence. RSI oversold divergence has become the bottom of the daily level many times in history, with a very high accuracy rate. After falling to the MA120 daily line, the market quickly stood on the MA120 daily line. I have systematically studied various technical indicators and conducted backtests. RSI and MA120 daily line are relatively effective indicators sorted out from various indicators.

3 The market is substantially strong

Why was BTC substantially weak at 70,000 in March? And now BTC is substantially strong at a similar price at that time? The ancients said:

Observe his words and observe his actions to know his people. This is true for people, and it is also true for the market. If you are a banker with large funds, or have deep relationships to obtain key information, you can naturally influence the market. However, for ordinary people like us, we need to check the corresponding trend of BTC based on major events and broad views in the market to observe the substantial strength and weakness of the market.

In March, ETF funds led the market to rise all the way, and a lot of good news appeared in the market, and the overall bull market was expected to come. However, the market stagnated at 70,000, and the cottages peaked one after another.

In July, the German government sold BTC, Mt. Gox paid compensation, and the US government moved BTC. These are not only negative news, but also real selling pressure. And after several months of weak market conditions, many people are now bearish on BTC. As for the actual trend of BTC, the German government has sold all its BTC, and Mt. Gox has paid more than half. But the price of BTC is still around 67,000.

In summary, the market is bearish, there is bad news, there is huge selling pressure, but BTC is still strong. So it is substantially strong.

Other issues

4 The bottom time is not enough

Indeed, the ideal situation is to oscillate at the bottom after the decline on July 13, and to make sufficient turnover. In the past, it took about 1 to 2 months. However, BTC pulled up again after a short week.

To be honest, I am also quite hesitant about this. And I also noticed that BTC pulled up against the trend despite the negative news of the German government's sale. There are two possibilities here

1) The position of 53,000 is not the bottom, and it is just a rebound now

2) There is capital in the market to grab chips, because the BTC bull market is approaching, so the time at the bottom is relatively short.

Combined with other performances, the second probability is more likely.

5 About Trump's situation

All Trump's events are not taken into consideration in my analysis.

6 Uncertainty of trend

The certainty of this rising trend is lower than the last time, because there are several uncertain factors affecting the market

1) The bottom did not fluctuate for a long time

2) Mentougou still has more than 80,000 BTC distributed, and the US government's BTC also shows signs of moving

3) The US stock market is at a high level, and it is uncertain whether it will be adjusted. I don't understand

7 Suggested Operation Strategies

In terms of operation, we will operate according to the highest probability, that is, according to the market that is about to start. I personally recommend holding 50%~60%, and increase the remaining BTC position when it breaks through the previous high of 73,000. In case the market trend is a low probability situation, then you can increase your position in the second plunge.

Because the biggest future gains will come from the cottage market after the main uptrend of BTC, we just can't expect too high a return on the first stage of BTC holdings. At this stage, it is recommended to mainly hold BTC.