Using The Ultimate Oscillator To Predict A Crypto Bull Market
This is a simple post about only one thing: The Ultimate Oscillator. Back in March, I made a post explaining why the UO could have been telling us that Bitcoin had already found bottom. Since then, that analysis has turned out to be correct, so I take this indicator fairly seriously:
I find the UO to be much more accurate in terms of divergences and marking longer timeframe tops and bottoms. Check out the above chart. You can see that during the 2015 bottoming period, the weekly UO continuously failed in the mid 60's. It then kept falling back towards the 38-40 level at each test of support. In our current cycle, we just tested that support level again. I've marked the 4 main levels for the oscillator on my chart, so you can see how important they are. In the previous bull market, you can see that the weekly UO tended to top out near 80, while finding support in the mid-50's.
Based on this simple data, perhaps we can say that the UO will indicate a new bull market when we find support instead in the 55-56 area on the next test of the low 60's. You can see that moment from 2016 circled in green. Circled in yellow is where I believe we could be in the current cycle. The main difference here is that in August, 2015, the UO didn't touch the bottom 38-40 zone. So perhaps this is a notable difference.
On this chart, I've also drawn speculative projections for the total cryptocurrency market valuation and the Ultimate Oscillator. If you've been following my recent posts, you'll know that I'm not expecting the market to break ATH levels for at least a couple of years. I think it's possible that our next wave up could take us rather close though, before breaking the long term trend and confirming a slower growth scenario, where crypto might follow what Amazon stock did after the dotcom bubble pop. I made a separate post about that:
Either way, if the UO breaks out into the bullish zone, between 70 and 80, while finding support at 55-60, I think it'll be safe to say that we've entered a bull market. This can also happen sooner rather than later.
Anyway, that's it. Shorter than my usual posts, but I wanted to just focus on one observation. This is not financial advice. This is my own opinion, and in no way does it represent an absolutist view. There is no guarantee things will pan out the way I hope or expect.
-Victor Cobra
I find the UO to be much more accurate in terms of divergences and marking longer timeframe tops and bottoms. Check out the above chart. You can see that during the 2015 bottoming period, the weekly UO continuously failed in the mid 60's. It then kept falling back towards the 38-40 level at each test of support. In our current cycle, we just tested that support level again. I've marked the 4 main levels for the oscillator on my chart, so you can see how important they are. In the previous bull market, you can see that the weekly UO tended to top out near 80, while finding support in the mid-50's.
Based on this simple data, perhaps we can say that the UO will indicate a new bull market when we find support instead in the 55-56 area on the next test of the low 60's. You can see that moment from 2016 circled in green. Circled in yellow is where I believe we could be in the current cycle. The main difference here is that in August, 2015, the UO didn't touch the bottom 38-40 zone. So perhaps this is a notable difference.
On this chart, I've also drawn speculative projections for the total cryptocurrency market valuation and the Ultimate Oscillator. If you've been following my recent posts, you'll know that I'm not expecting the market to break ATH levels for at least a couple of years. I think it's possible that our next wave up could take us rather close though, before breaking the long term trend and confirming a slower growth scenario, where crypto might follow what Amazon stock did after the dotcom bubble pop. I made a separate post about that:
Either way, if the UO breaks out into the bullish zone, between 70 and 80, while finding support at 55-60, I think it'll be safe to say that we've entered a bull market. This can also happen sooner rather than later.
Anyway, that's it. Shorter than my usual posts, but I wanted to just focus on one observation. This is not financial advice. This is my own opinion, and in no way does it represent an absolutist view. There is no guarantee things will pan out the way I hope or expect.
-Victor Cobra
