- BTC thrashing around in base zone but bullish skew
Global markets are currently volatile, more or unless untradable day by day and headline driven. There were some wild moves last session with Gold and Crude Oil dumping and S&P 500, Eurostoxx and Nikkei futures pumping.
Bitcoin posted an unusual two session set of price candles. We had a wide range day yesterday that closed up on the session by over 10% and today another wide range day that so far is trading way below the open price on what is called an inside day (i.e. inside yesterday’s range).
I ran a study going back to the start of 2015, so that’s 2,335 sessions worth of data, and asked what happens next when: a wide range up day (greater than 10%) above the 20 day moving average is followed by a wide range down day. There are 14 such occurrences in the sample.
Here are the stats: over 5, 10 and 15 days out. 5 days close to close average gain is 3.5% but 50% of returns were negative. 10 days average gain is 5.2% with 64% positive and 15 days average gain is 12.9% and 57% positive. Its a small data set, but it shows the set up is rare only happening on average once every 167 days. It also shows a bullish skew overall with more confidence at the 10 day mark.
For now Bitcoin is still above support, still in what I think is in a base building range and still has good potential to rally out of the 44,900 resistance level above us now.