Why The Next Bitcoin Bear Market Will Be The Worst Yet

Tony "The Bull" Severino

1 year ago

3 mins read

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Bitcoin price continues to sink, and when it isn’t falling its barely able to move sideways, with “up only” the one direction the cryptocurrency won’t go.

Whether or not the crypto market is headed toward another bear market or not is debatable for now, but technical analysis suggests that when the peak of this cycle arrives, it could bring with it the worst bear market in the history of cryptocurrency.

Analyzing The Secular Bitcoin Bull Run

A secular market is defined as “a market that is driven by forces that could be in place for many years, causing the price of a particular investment or asset class to rise or fall over a long period.”

“In a secular bull market, positive conditions such as low-interest rates and strong corporate earnings push stock prices higher,” an except in Investopedia reads.

Since the birth of cryptocurrency, Bitcoin has only known a bull market. The technology was born during The Great Recession right as quantitative easing began. The stock market has mainly experienced upside since, and Bitcoin price itself has risen from $0 to $65,000 at the local all-time high.

The bull trend has never once ended on this timeframe | Source: BLX on TradingView.com

Even technical indicators, such as the Average Directional Index suggest that the leading cryptocurrency by market hasn’t truly seen a bear market, despite what past drawdowns might feel like to those that lived them. But trends are only over when the ADX reads under 20 – or the dashed line above.

The tool also shows the strength of bulls (in green) diminishing while bears (in red) are getting stronger with each major wave up. But that’s still not the signal that suggests a much worse crash when the next cycle ends.

Why The Next Crypto Bear Market Could Be The Worst Yet

Cryptocurrencies are a speculative asset class, first born with Bitcoin. No one truly knows how’s to assign a value to the asset, and thus price action can be more volatile. Because speculative assets are driven more so by investor sentiment and emotion, it responds especially well to certain types of technical analysis, such as Elliott Wave Theory.

Elliott Wave Theory is both simple yet complex, and is based on the idea that markets move based on impulse driven waves. These waves and their potential paths and outcomes can be predicted with some degree of accuracy, so long as certain characteristics and conditions are present.

According to Thomas Bulkowski, the ending diagonal “is a special type of motive wave that occurs primarily in the wave 5 position when price has moved too far and too fast.”

Is Bitcoin forming an ending diagonal? | Source: BLX on TradingView.com

Bulkowski calls this a form of “rising or falling consolidation” and says that “in all cases, the ending diagonal terminates the move of larger patterns.” The ending diagonal is the result of an extended fifth wave which has a set of five impulse waves within the ascending wedge-like shape.

When it finally breaks down, price action could correct all the way back down to where the pattern began to form, which would be more than $1,000 – but lower than the $3,000 bear market low. If Bitcoin truly is to make it to hundreds of thousands of dollars per coin, and the ending diagonal pattern is accurate, things could get a lot more volatile than anyone would ever expect.

Follow @TonySpilotro on Twitter or via the TonyTrades Telegram. Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

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.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

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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