Bitcoin Monthly Shows Indecision, Data Reveals The Shocking Aftermath of Past Doji

Tony "The Bull" Severino

4 years ago

3 mins read

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Bitcoin price has traded sideways for the entire month of June. The lack of conviction by both bears and bulls has resulted in a doji currently on the monthly timeframe on BTCUSD charts.

If the cryptocurrency closes tonight around current levels, the doji will be confirmed. However, past data suggests that this isn’t a bad thing for Bitcoin, and could precede a powerfully bullish move.

Market Cycles, Repeating Patterns, And More: Crypto Analysts Rely on Historical Data For Decision Making

Bitcoin is a relatively young asset in the financial world at just over a decade old. Due to this, analysts only have a small sample size in which to compare current price action against historically.

Things may not play out exactly the same way a second or third time in the land of cryptocurrency. However, markets are cyclical, and history often repeats.

Fractals, or repeating price patterns, exist for those very reasons and appear with much frequency.

Other repeating chart patterns, such as triangles and wedges, can tip traders off as to what the next move may be. Japanese candlesticks also serve this purpose, making them popular with traders performing technical analysis.

These candlesticks also form patterns or can act as signals all by themselves. Doji are just one type of singular Japanese candlestick that can provide powerful clues as to what comes next.

Doji show indecision in markets, and either act as a prelude to a reversal, or strong continuation. Occasionally, doji will form in a cluster, dragging out indecision until an explosive breakout occurs.

One of these indecision candles will form on monthly BTCUSD price charts if the cryptocurrency continues to trade at current levels.

Bitcoin Monthly Doji More Likely To Result In Continuation To Upside, Data Shows

Doji candles and indecision aren’t always a bad thing. They often come at the top or bottom of a trend just as that previous trend reverses. Doji can act as an important signal for traders to pay attention and watch for a breakout.

But if that breakout is in the direction of the prior trend, doji can be a prelude to strong continuation in the primary direction.

Bitcoin price has been trending up since the Black Thursday bottom in mid-March. Highlighting the importance of monthly candle closes, the following month in April closed as a bullish engulfing.

Bullish engulfing candles signal a short-term trend reversal. What comes after is what turns things from short to long term. May closed green, and now June’s consolidation and indecision are resulting in a doji.

But data from past doji candles within a 3.5% or less range, have resulted in a breakout to the upside ore than 50% of the time. Bitcoin is working on its tenth ever doji on monthly timeframes within a 3.5% or less range.

Bitcoin BTCUSD Monthly | Source: TradingView

Five of the prior nine times have resulted in a long-term move to the upside. Two of the instances, resulted in a massive move to the upside, followed by a bearish reversal.

The final two times, occurred shortly after a new peak was set, and resulted in a long-term downtrend.

Thus far, all negative performing doji have resulted in a break to the upside. If Bitcoin closes at current prices below $9,200, the monthly close will fall into that negative category.

Things could change within the next several hours before the monthly close occurs, however, what comes following the close is what matters most.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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