Half Yearly Pivot Analysis for the Crypto Market
Back at the beginning of 2022 I dared predicting targets for the Crypto Market based on Technical analysis relaying on Pivots. Did it work?
Let me start by saying: “I am a technical chartist who cares less about the fundamentals”. OK, let me rephrase that: I do care about fundamentals but I see them as background noise which is amplified by the charts and not the other way around. If you ask me, and also have a look at my twitter account, many times you can see the fundamentals approaching in the TA before they come roaring in the reality. So this is what I do care about: charts, their Pivots and some other completely ordinary TA stuff like price action and S/R levels. If you still don’t know what Pivots are feel free to either read one of my past stories, or go watch a video where I explain a bit about them. For some reason, Pivots are considered an archaic trading system/indicator and hardly anyone looks at them anymore - and that is a grave mistake as I’ve demonstrated in each of my past market analyses, and going to show once again as they work their magic upon closing on half a year of price action in 2022.
Let’s have a look first at this perfect trade on Solana as a fine example. The Weekly chart below (all charts shown here are weekly charts) shows my scenario prediction for $SOL playing out from the beginning of the year approaching on the end of the first 2022 half. The Year opens with some hesitation before an initial dump followed by weeks of tiptoeing up to establish Support as Resistance. That was a perfect entry for a perfect short trade: Pivot to S1. Joy & 81% profit. The Yearly S1 was also serving as a very high probability zone for a buy. Did you?
So there you have it - one perfect trade. What about the others though? This is my original list with links for 15 assets that is still very relevant from the opening of the year analysis:
Out of those 15 assets. eight have played out to their Pivots and as I write these lines, some have exceeded original targets and might be on the way to secondary targets. Like Bitcoin (see below). Others have not “yet” reached the predicted targets but are in an interesting place of Cardinal-Horizontal Support and might be trying to tell us something about the market as a whole. Let’s have a look at Bitcoin first and some other assets that did play out to initial yearly targets. I’d like to take the opportunity to remind you that it is perfectly fine to take profit at a certain target even if the market continues above or in our case, below it. It’s also a valid strategy to take at least some portion of profit off the table at a set target - in our case it’s the Yearly S1- depending on your risk apatite. It’s also important to remember that the time frame and type of trade I am referring here to is what we call a “Position Trade” that will run between a few weeks to a prolonged period of months. It’s a trade for the patient ones and it offers huge advantages like relatively outrageous amounts of free time to do other stuff and a enormous profit potential with balanced Risk/Reward. I will write something about this type of trade in depth at some point in the future, but for now here’s Bitcoin:
The year opened with a red Weekly closing below the Yearly Pivot signaling things to come. Some price action indecision after an initial dump that brought price to a perfect Short entry back on the Yearly Pivot. From there on it’s mainly about sitting on your hands. Waiting for that target - The Yearly S1- a 45% trade. Yes price indeed went down further but Targets are targets, Profits are profits, and as I’ve mentioned already, It’s up to your personal risk apatite and Position management.
If you are the type who was letting it run, at least partly (I wasn’t, the partly part) then again, the year is still not over and if legacy markets mega-bears wake up from their decades long sleep, this might get ugly real fast while reaching the Secondary Target.
The S1'ers & The Cardinals
So as you can see Both Solana and Bitcoin acted similarly this first half. But as you probably know, the whole market followed Bitcoin to some extent or another. Here are the other assets that indeed reached those Yearly S1 targets and mostly continued further down. Here are Fantom, Avax, Matic, Cosmos and Ethereum all making it to that initial target of the Yearly S1, and mimicking Bitcoin further down:
All and all fantastic trades with a return of 60%-80%. You can see that most continued down to find their own Cardinal support while following Bitcoin. The same goes to the second asset group which has not reached it’s S1 targets simply as it is located “too low” (We know such a thing does not really exist right? Luna proved this point), or simply did not plot a Yearly S1.
These trades to the respective Cardinal S/R levels, gave a 70%-85% return and could have been those high risk apatite trades I was talking about before, just letting them run to these Support levels.
Looking at them closely and the market as a whole, it is safe to assume with high probability that these are critical levels with an abyss below them. As I’ve mentioned many times, this market is mostly propelled by a single asset - Bitcoin. And this asset has now touched on it’s past hype cycle peaks, those $18-$20k levels from that December 2017 blow-off. If it does not manage to protect these levels, even in the face of strong legacy markets decline, it is with high likelihood IMO that we will see it reaching the Yearly S2 at the $6k zone. I am at this point inclined more to the up than the down side for this market, in terms of PA probability, but my inclination is Short to Mid term at this point of time.
This piece will be followed shortly by a new Quarterly Pivot based prediction as soon as new ones print at the beginning of Q3. When this happens we will have a better understanding of what the market could have in-store for the next three months.