For many Bitcoin investors who have been through it, this crypto winter is feeling more painful than the bear market of 2018, despite a smaller drop from peak to through. From a monthly momentum perspective, the bearish trend is now the strongest on record. Let’s see what this means and where the market is in comparison.
Log MACD points to the worst crypto winter in history
As a speculative asset class, cryptocurrencies are volatile – driven wildly by speculation and opposing ends of greed and fear. There is no denying that the current market is one of the most terrifying since Bitcoin’s inception. It was born in the aftermath of the 2008 financial crisis and the major cryptocurrency is now facing its first potential recession.
Past monetary policies have allowed the asset class to prosper and grow, while current policies have allowed prices to fall significantly in a short space of time. The result may be the worst bear market in Bitcoin history, according to the LMACD.
Monthly bearish momentum is the strongest ever | Source: BTCUSD on TradingView.com
LMACD is the logarithmic version of the Moving average convergence divergence indicator. The original tool was created by Gerald Appel in the late 1970s, while this version is best used to compare historical momentum.
Looking at the monthly LMACD for BTCUSD, the dashed zero line shows that Bitcoin never even made it into bear territory in 2018. During this bear market, the MACD line in the blue is also historically at an all-time low. The orange signal line has never gone below the zero line and could very well do so in this cycle.
Has The Bitcoin Bull Trend Officially Ended?
According to the Average directional index and any Direction Movement Indicator, bears are stronger than ever before and have prevailed in crypto for the longest period of time ever.
If you drop below 20, it indicates the end of a trend, possibly indicating that the trend that started in 2015 is just now really coming to an end. Rising back above a 20 level after falling below should help confirm another bullish trend.
The bull trend has ended, but will a new one begin? | Source: BTCUSD on TradingView.com
While the ADX shows that the 2018 bull trend never fully concluded, the weaker trend strength overall explains why the returns from the 2018 bottom were nowhere near the same as the rally from the 2015 bottom, which was a significant force behind had herself. .
With the bullish trend fading out, when bulls regain control and a new trend blossoms, it could be much more sustainable than what we’ve seen in crypto over the past few years.