Instead of going with BTC example I'm going with CHR for the purpose of an extreme example. I'm also using a 4H chart for the purpose of clarity, market could move in a different time frame with their cycles. There could be yearly cycle, monthly, weekly, etc. Every coin is different and the purpose of this article is to teach you how the general great cycle works.
Above is a chart of Chromia, Chromia is a new blockchain platform for decentralized applications, conceived in response to the shortcomings of existing platforms and designed to enable a new generation of dapps to scale beyond what is currently possible. A one sentence for the fundamental, now look at the technical for this article.
As you can see the past bull season for CHR ends at 11 Aug 2020, followed by a bearish wave. Here's what you need to understand. The past wave is extremely bullish, check picture below
It sends a 417% increase in 81 days, followed from the top to bottom with a 77% correction
The phases generally follows this,
- A bullish wave
- A bearish wave or pullback
- Consolidation period
So let's talk about each part, a bullish wave, as the name suggest, I suggest you looking at a longer time frame, I'm actually annoyed on people looking at 15 minutes chart to make a decision, they're essentially making their lives harder than how it already actually is. It's back on trading style, so obviously, when you look at the chart above, the uptrend doesn't happen on all green candles, there's retracements along the way. Even the bearish wave doesn't consists of all red. When you zoom out, you understand how the bullish momentum and bearish momentum works, vice versa, if you're looking at a smaller timeframe it's harder to measure the momentum.
So now you understand the importance of looking the price action at a longer time frame, we can continue. After a bullish wave, a pullback or a correction occur, in other words, the price of the coin was overvalued and the correction of the price actual worth needs to be made. This is the reason why a bearish wave takes time, eventually coming up to a consolidation phase, where the market is convinced that the price of the coin is not overbought or underbought but just right. One thing that most trader tends to forget is to understand, this process takes time.
On the chart above, it's 156 days, I call this period, a pullback/consolidation/accumulation period. Accumulation period because in this cheapest price of the coin, is where long term holders accumulate. Why accumulate, well for obvious reason, the next bull market. Want to know what happen after?
That picture above, makes the past pictures that shows CHR past ATH looks like an absolute joke. CHR manages to outrun its past ATH with a 3508% increase in only 55 days. That's insanely high gains.
Other example sir, how is that not a one time thing?
Let's take a look on on one of the most bullish macrocycle that shows a similiar resemblance to CHR
Now look at how the price of CHZ on the picture above being denied on $0.0198 as resistance, if you don't know what a resistance is, I suggest reading my article below that explains what it is. It also covers multiple trading setups with different strategy.
On the chart above, it has been denied 3 times before finally bursting out and making the past resistance as support. That is a really bullish signal and we will see a lot of that in the upcoming months. Let's take a look on what happened on CHZ afterwards.
A jaw dropping, life changing 7614% increase in only 89 days! Insanely huge gains for the winners who accumulate in the accumulation period.
As for the current CHZ condition, CHZ is currently having a pullback and a mild bearish wave as you can see, the price is currently undergoing a correction after an obviously high bullish surge. I believe a pullback and a healthy correction is needed before CHZ another leg up. I could say, CHZ treated me well.
If there's anything you want me to cover feel free to send me an email through firstname.lastname@example.org