Hi everyone,
Wanted to post a quick chart to show the history of bitcoin [BTC]’s price action and its relationship to the mean. If you look back in time, you will see that after price falls significantly from the mean, or rises too far past it, it always corrects back toward the 135DMA, which I have shown on the chart. This is why I feel that at this time we are much, much more likely to rise up toward the 135DMA than to fall much further from here and why I called for a massive rally recently, see
We bottomed at -47% below the 135DMA which is about as low as price falls (with the exception of late 2011, but that was also after we went above the 135DMA by +883%!) This is important to remember at times when price is dropping dramatically, or rallying to unbelievable highs. Remember… price WILL revert to the mean, it always has, and most likely always will.
When price is significantly below the mean, typically about -50%, it can present some great buying opportunities. When price gets way out of line and above the mean, by at least +50%, then it is time to be cautious. This in addition to other indicators as well as general market sentiment can be used to help with your trading strategy.
Take care, and best of luck out there!
Published at Sat, 05 Jan 2019 00:57:23 +0000
