With the 3 day 'death cross' (200 & 50SMA) a matter of days away let’s look back at what this has meant for the price historically
The 3 day 200SMA and 50SMA have crossed on 2 other occasions:
Once in 2014 where we had a 61% drop with a bear market lasting 137 days, with it taking approximately 1 month before we hit the low or ‘bottom’
The other time was in 2018 where we had a 51% drop in price with a bear market lasting 293 days, again it took approximately 1 month before we hit the low or ‘bottom’
If we take this data and apply it to the current chart it would put us at 19k with a bear market possibly lasting 174 days (if we manage to avoid a global recession and great depression)
Something else that gives further argument for this move further towards the downside is the Fibonacci levels. The .236 (purple line) at $33,278 has been broken and if we close below this on a weekly timeframe, so close of play Sunday, then it has a very high probability to move down towards the .382 (yellow line) which comes in at $21,273.
For those of you not familiar with Fibonacci levels this is an extremely high probability move and is one of the staple trades for fib level traders.
The purple diagonal line represents the weekly 300SMA which as you can see has provided us with vital support on previous dumps and bear markets.
All this said I do expect some green at the start of the week with the stocks looking like they will correct back up a bit but only a small relief rally to 34-35k at most to shake out the shorts before further downside.
As always leave a like and let me know your thoughts!
The 3 day 200SMA and 50SMA have crossed on 2 other occasions:
Once in 2014 where we had a 61% drop with a bear market lasting 137 days, with it taking approximately 1 month before we hit the low or ‘bottom’
The other time was in 2018 where we had a 51% drop in price with a bear market lasting 293 days, again it took approximately 1 month before we hit the low or ‘bottom’
If we take this data and apply it to the current chart it would put us at 19k with a bear market possibly lasting 174 days (if we manage to avoid a global recession and great depression)
Something else that gives further argument for this move further towards the downside is the Fibonacci levels. The .236 (purple line) at $33,278 has been broken and if we close below this on a weekly timeframe, so close of play Sunday, then it has a very high probability to move down towards the .382 (yellow line) which comes in at $21,273.
For those of you not familiar with Fibonacci levels this is an extremely high probability move and is one of the staple trades for fib level traders.
The purple diagonal line represents the weekly 300SMA which as you can see has provided us with vital support on previous dumps and bear markets.
All this said I do expect some green at the start of the week with the stocks looking like they will correct back up a bit but only a small relief rally to 34-35k at most to shake out the shorts before further downside.
As always leave a like and let me know your thoughts!
Yorum:
Something else which puts the price down at the 21k area is the target of the bear flag which was broken a few weeks back, see the white vertical lines on the below chart image
