Calling a bear market bottom is almost impossible, but we have listed some useful indicators to help you get an early signal of when a downtrend is about to end.
The crypto bull market is gone and the extended crypto winter is a major challenge for crypto traders. Bitcoin price fell to levels that were never expected, leaving traders wondering how the oldest crypto will make it back.
With the prices dropping every other day, the main question remains, “when will the market hit bottom and take an uptrend?” It is impossible to predict, but we have some indicators that can help to show when the crypto down trend is about to ebb out.
When the Crypto Market Starts Recovering
This is one of the traditional methods of determining when the crypto winter is about to ease. In 2018 and 2019, news of layoffs in the crypto market was all over the media. Major companies like Huobi and CoinFloor sacked part of their staff.
The recent crash also saw some companies shedding off their staff. Coinbase reduces its workforce by 18% and Gemini by 10%. So, if you notice these companies, among others in the crypto industry, are starting to hire, know that the winter is about to end. It will indicate liquidity is flowing back once again.
Check Out if the BTC’s 200-Week SMA Becomes a Support or Resistance
One technical development that shows a bear market might be approaching the end is when the price dips below the 200-week SMA and then climbs above it. A strong BTC price recovery back above the realised price (the aggregate price of all BTC) can be used as an indication that the trend is about to change.
The Two-Year Moving Average Multiplier
Another useful metric that can provide a simplified way of determining when the crypto bear market is over is the 2-year moving average multiplier. This indicator tracts two years moving average and then a 5X multiplication of the 2-year moving average with the BTC price.
If you notice the price falling below the 2-year MA, it means that the asset has jumped to the bear market. However, an uptrend is likely to follow if the price climbs above a 2-year MA. You can use this as a signal of when it might be right for accumulation.
Always remember that no matter the indicator you select, there is no single one that is perfect.