- There is a low timeframe indicator than can forecast a Bitcoin bull run
- The 200-4HR MA indicator is a great way of determining a trend reversal
- How can we use the indicator to forecast such a sentiment change?
There are a plethora of complex technical indicators that we can use to see when market sentiment has shifted from bullish to bearish and vice versa, but sometimes it pays to keep it simple. There is one straightforward indicator, consisting of one line, that can help indicate the end of a bear market over the course of just a few days. Let’s find out about it and how to use it.
Bear Market vs Bull Market
The indicator in question is a simple 200 4HR moving average (MA), with the 200 representing the last 200 blocks of 4-hour price action. This means that it is tracking the closing price of Bitcoin in the last 200 blocks of 4 hours. This may not mean much, but let’s see what this indicator looks like in a bear market:
As we can see, in 2018 and early 2019, Bitcoin by and large remained pushed under the 200-4HR MA, with every jump above it being swiftly knocked back. The 200-4HR seems to have almost kept Bitcoin pinned down in late 2018, which was followed by the November 2018 capitulation.
The scenario is very different once this area is slipped for support however:
We can clearly see that one Bitcoin flipped the 200-4HR MA the bull market was officially on, with Bitcoin generally staying above this line the entire way up to $65,000.
How is Bitcoin Shaping up in 2022?
What we’re looking for then is a sign that Bitcoin is ready to flip this 200-4HR line and use it as support. Looking at the price action since November 2021, we can see that things are not shaping up well for bulls:
It’s pretty clear that Bitcoin is well under the thumb of the 200-4HR MA, and we should expect some bottoming out and periods of boredom as the bear market really takes hold.
What we’re looking for is a repeat of October 2020, when things finally took off:
When we see a pattern like this however, we can be sure that the good times are about to roll again. It’s worth remembering however that this took place almost three years after the prior cycle top…so don’t hold your breath.