In its history, the cryptocurrency market has experienced multiple severe bear markets, but each time it has come out stronger. to more accurately recognize the signs of change in the present bear market. To forecast price bottoms, we must use the same technical indicators that were most reliable during the last bearish cycle.
What is an Indicator?
Indicators are hints, cues, or markers that assess one area of a program and reveal how closely aligned it is with its intended course and results. Realistic and quantifiable metrics for project progress are indicators. They should be established before the project begins and enable us to monitor or assess if a project accomplishes the goals it set out to achieve. The connection between theory and practice in project planning is formed via indicators. An indicator is a tool that enables you to determine whether your efforts are having an impact. Indicators often indicate occurrences or changes that may be seen and are connected to the project intervention. They offer proof that something has occurred, whether it be a delivered output, an immediate consequence that took place, or a long-term change that was noticed.
#1 200-Day Simple Moving Average
The most significant moving average utilized by traders and investors worldwide is the 200-day simple moving average. Often, the 200-day SMA will break and close above on a daily basis to indicate the end of a negative trend. The signal is stronger the longer the price of an asset stays above the 200-day SMA.
#2 RSI Oscillator
Another helpful technical indicator that can assist investors in determining the buying and selling pressure is the Relative Strength Index (RSI). Longer time frames typically provide stronger RSI reversal indications.
For a more cautious approach, the end of a bear market might be confirmed by a weekly RSI break above the 50 mid-level.
#3 Moving Average Multiplier
The 4-year SMA, which monitors the 4-year halving cycle, is another indicator of a bear market bottom. Using the 48-period SMA (4 x 12 months) applied to the monthly chart is preferable for cryptocurrency investors. Notably, every time the price of Bitcoin fell below the 48-SMA before rising again, the bear market had ended.
When will the Bear Market end?
While predicting the exact end of the bad market is difficult, by examining previous bearish cycles and price bottoms, we may more accurately predict when the current negative cycle will come to an end.
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