Market Trend Analysis: August may become the main turning point for the encryption market

Original Author: Digital Asset Research

Original translation: Peisen, BlockBeats.

Editor's Note: Digital Asset Research provides detailed data on long aspects such as time range, price range, and time angle to demonstrate the high probability of significant events or news occurring from August 6th to 12th. The article also compares the current market cycle with previous cycles, pointing out the time patterns of market trend changes, and provides ample evidence through monthly and weekly chart analysis.

This is something that I have already publicly discussed for some time, but today I want to confirm again that the evidence shows that there may be significant trends and emotional changes in the BTC and broader cryptocurrency markets during the period from August 6th to 12th.

A few months ago, I mentioned this time frame for the first time in a video outlook, which you can find here.

Today, I will present all the evidence gradually established based on the time range, price range, and time perspective. I think you will see a high probability of significant events or news occurring within this time window.

We will start from the monthly chart and go all the way to the daily chart to show the convergence of multiple factors we see.

The monthly chart is the content we focused on following last week, but to further prove that we are in the same cycle, we have also added the months of the previous two tops. As you can see, the two previous cycles are almost identical to the current one. The 33 months from the major high point and the 20 months from the major low point both place us in the period from July to September, which is the final low point before a significant pump.

Now we know that time is on our side, but many people believe that this cycle is different because the price quickly reached a new all-time high. However, let's compare the current cycle with previous cycles on the monthly chart.

The evidence is quite shocking. As you can see, except for 2012, the price in the first two cycles pumped just over 200% from the Bear Market low point, exactly at the time we are in now. You can see that this time is no different. In fact, time and price are where they should be, neither overextended as some commentators have said, nor beyond expectations.

Next, let's take a look at the weekly chart, and there is more long content to discuss. First, we found that there will be a major trend change every 30 weeks in this cycle. However, interestingly, this 30-week cycle happens to be between a major low and a major high. I will explain the reason in the next few charts, but for now, let's look at the next 30-week cycle, which happens to be the week of August 12th. These three 30-week cycles add up to a total of 90 weeks from the Bear Market low.

In addition, zoom in on the weekly chart. I noticed that from the high point in 2017 to the first significant high point in 2021, it was 174 weeks. August 12th will be 174 weeks from the significant high point in April 2021, undoubtedly an important high point. Therefore, we are approaching the same time period between two important turning points, the high point in 2017 and the high point in April 2021.

Now, based on our evidence, this market is in a different phase. In my opinion, the turning point is more likely to occur in the form of a major low rather than a major high. But as I have always said, in these cycles, we often see a major high and low simultaneously in this time window.

The chart below shows this particular period in each cycle, as well as the situation at this time last year in the current cycle. As you can see, there is almost always a sharp pump in August, followed by a rapid decline, with a drop of up to 20-50%. Unlike the other three charts last year, it was only in the second year of the cycle, but it shows the seasonal pattern of this type of trend occurring in August.

It also shows significant highs and lows around the turning points of the market in this cycle, with a relatively tight time window of 30 weeks.

Now let's look at it from a time perspective. Simply put, the time perspective refers to starting from a significant high or low point and calculating 30 calendar days to find trend changes. You only need to start with 30, then add 30, 60, 90, 120, 150, 180, and so on, and look for trend changes at these time points. The more concentrated the time points are, the higher the importance of that day or week.

As shown in the chart below, all these time measurements fall within a time angle window. In this cycle, we have several major highs and lows all pointing to the second week of August as a major convergence period.

Finally, from a time range perspective, the market has been following a cycle of 150 days in this cycle: 155 days of pump and 150 days of consolidation. It is worth noting that the balance of market time should not be imbalanced. That is to say, the number of days the market falls should not exceed the number of days of pump. In a Bull Market, the time the market pumps is usually longer than the time it falls, as shown in the chart below. If the number of days the market falls exceeds the previous 150 days and a new low is reached, this will not be a good sign.

Finally, taking into account the price range, time range, time perspective, and seasonal factors, we are approaching a mid-August window that is likely to be a trigger point for BTC. If this evidence is not sufficient, please note that the start date of the BTC chart is August 19th. I won't discuss this issue too much, but the birth date is important, and August is usually the month when the main Bull Market begins.

This is why I am cautious here and waiting for the window to end before taking more active actions. Will we see the ETH ETF finally start trading, followed by a rapid decline like the BTC ETF? Or will we see more long political headlines triggering election uncertainty? I'm not entirely sure what it will be, but it's definitely a period worth following and being patient.