Top 3 Indicators to Identify the End of a Bear Market
The crypto market has gone through several major bear markets in its history, and each time it emerged stronger. To identify the signals of change better in the current bear market. We need to look at the same technical indicators that were the most accurate in the previous bearish cycle to predict price bottoms.
What is an Indicator?
Indicators are clues, signs or markers that measure one aspect of a program and show how close a program is to its desired path and outcomes. Indicators are realistic and measurable criteria of project progress. They should be defined before the project starts, and allow us to monitor or evaluate whether a project does what it said it would do. In project planning; indicators form the link between theory and practice. An indicator is a tool to help you to know whether your work is making a difference. Indicators usually describe observable changes or events which relate to the project intervention. They provide the evidence that something has happened – whether an output delivered, an immediate effect occurred or a long-term change observed.
#1 200-Day Simple Moving Average
The 200-day simple moving average is widely the most important moving average used by investors and traders around the world. A daily break and close above the 200-day SMA often signals that the bearish trend has ended. The more time the price of an asset remains above the 200-day SMA, the stronger the signal is.
#2 RSI Oscillator
The Relative Strength Index (RSI) is another useful technical indicator that can help investors assess the buying and selling pressure. Usually, the RSI reversal signals are more powerful on the longer time frames.
For a more conservative approach, a break in weekly RSI above the 50 mid-level can confirm the end of a bear market.
#3 Moving Average Multiplier
Another bear market bottom indicator is the use of the 4-year SMA, which tracks the 4-year halving cycle. Crypto investors are better off using the 48-period SMA (4 x 12 months) applied on the monthly chart. Notably, every time Bitcoin's price broke below the 48-SMA and then broke above the SMA, it signaled the end of the bear market.
When will the Bear Market end?
While it's tough to pinpoint exactly when the bear market will end, studying the previous bearish cycles and price bottoms, we can better assess when the current bearish cycle will end.
