Bull Market Ambivalence

If you've been following the news on price developments for Bitcoin this past week, you may have noticed some contradicting headlines; some claim we've entered a new (phase of the) bull market, and some claim the opposite. This short post is about this observation I made, and a possible explanation for it.

I follow a number of crypto-market price watchers on YouTube who do the technical analysis I myself am incapable of doing. Well, maybe not incapable, but it would command too much of my time to really dig into the material, and I'm not naturally inclined to put much faith in the mechanisms of "the market" for reasons I won't elaborate on here and now. I'm also not interested in trading or speculating myself, it's more of an interest I've developed as a result of so much emphasis on trade in this space. Like I said in the introduction, some are extremely bullish, especially after the quite explosive run to $47,000. I even saw a return of the $100,000 meme, which I found quite optimistic, to say the least.

So why this sudden euphoria paired with other voices that warn of too much euphoria? For that answer I point you to the included video which was published today by one of my favorite analysts, Benjamin Cowen. The reason why he's one of my favorites is straightforward; he always considers the longer time-frames when analyzing price action, and almost never zooms in on hourly candles but instead focuses his attention on weekly and sometimes monthly candles to draw his conclusions. Benjamin gives what is in my opinion the best explanation for the euphoria as well as the ambivalence among analysts.

He talks about the so called "Bitcoin Bull Market Support Band," a price range delimited by two progressing technical indicators which point to future price action when these two lines cross over. We're talking about the 20 week SMA (Simple Moving Average, red line) and the 21 week EMA (Exponential Moving Average, green line), with the range between them being the bull market support band. The difference between SMA and EMA is that SMA is simply an average of price data, whereas EMA applies more weight to data that's more current. Two weeks ago Bitcoin's price moved above the bull market support band for the first time since 18 weeks and stayed there until now. As a result we saw this week a crossover of the two lines; the 21 week EMA moved above the 20 week SMA, which could be an indication that Bitcoin's price will rally up for the next weeks or months.

But it doesn't have to. We've seen many "fake" crossovers in the past and more times than not, the bullish price action doesn't happen immediately. So for now caution is paramount. Actually caution is always paramount in this youngest and most volatile of tradable assets. In other words, this post is in no way, shape or form to be taken as financial advice, and always do your own research! It's just an observation I made these past couple of weeks and an explanation for why it seemed to me that reporting on future price action was more ambivalent, even more than it usually is. This post can also be taken as an explanation why I'm not, and never have been interested in trading Bitcoin or other cryptocurrencies; I'm not here to make money, but because I believe in the fundamental promise of a better future.

Thanks so much for visiting my blog and reading my posts dear reader, I appreciate that a lot :-) If you like my content, please consider leaving a comment, upvote or resteem. I'll be back here tomorrow and sincerely hope you'll join me. Until then, stay safe, stay healthy!