Backtesting Bitcoin: From bullish to bearish

2021년 10월 23일

Hi there,

Personally, I think it's important to backtest prices. In this way, you better understand why a price reacts to events.
Today I backtested bitcoin. I was especially curious about how to recognize the switch from bullish to bearish. I use the daily chart for this because I invest in the long term.
Are you a day trader? Then you can also backtest on lower timeframes. Keep in mind that the uncertainty factor is a lot bigger.

The backtest
Before a bullish period turns into a bearish period, you need several confirmations.

1. We saw the trendline break. This is not yet a reason to become bearish because you can determine a trend in several ways

2. The support zone is broken. Combine this with the broken trend line and the higher low that is no longer valid.

3. Reason enough for me to make a Fibonacci from the highest point to the lower point. On the chart, you can see that I go from spike to spike. The price is looking for a retest before the big drop starts. This to me is the .649, .71 or .81 zone.

4. the price breaks the support zone, retests, and finally drops to the next larger support zone. At that moment a new accumulation starts and it is again waiting for new confirmations.