Similar charts, not necessarily out of the same market

26 Jun 2021

Bitcoin's recent moves are very similar to those of August 2020, but similar charts don't necessarily follow the same trend.

In August 2020, Bitcoin was in a platform breaking trend, which is similar to the current trend. It is also the 5-wave correction of ABCDE, and then began a new upward trend.

But the two market, there are also some differences

1. Average differential, the correction did not break MA144 then, whereas the current correction is below MA144

2. At that time, the rebound from the low of $3880 lasted 5 months, up less than 150%, while the current market, up 7 months, up more than 500%

3. Changes in the global financial market environment. Last March, the Federal Reserve in order to rescue the epidemic, excessive issuance of dollars, global funds are under inflationary pressure. Now that the epidemic has subsided and the economy has recovered, fighting inflation is the main task, and the Federal Reserve is talking about raising interest rates.

4. As the digital currency led by Bitcoin has performed well in the past year and become the leader in the global financial market, it has triggered the attention of governments and financial regulatory departments of various countries, and regulatory policies have begun to tighten. Although more and more financial institutions have occurred and supported Bitcoin, SEC has no intention to regulate digital currency, which means that ETF is far away. China has cracked down on mining in order to achieve a carbon peak, resulting in unstable calculations. There's a growing controversy over how big names like Musk manipulate currency prices through Twitter. If these issues are not addressed, digital currency will not truly become a mainstream financial product.

So we see two markets, similar charts, but also very different, if you want to get out of the September 2020 breakout market is not small. As an investor, there is no need to worry about where the market is going. What we need to do is not to go against the trend after it has formed.