Let’s avoid lines, averages and indicators for a minute and try to look at inferences the candles might be giving away in plain sight.
Observation: After a price increase of at least 400%, the last two times the market had 10 consecutive monthly candles with 7 closing down and 3 closing up, a decline of 50% was imminent. Will it play out this time?
Note: The pattern didn’t play out in 2011 so I didn’t include it. We had 6 candles down, 4 candles up, which is close to the criteria above, however the market was more parabolic and I’m not sure it makes sense to include this time period.
Note: Pattern also didn’t play out in 2020(it kind of did, but played out in month 9 out of 10, leaving us in the dark), but that wasn’t after a price increase, so I didn’t count that. Could just be a short-term distribution (see Nov 2015 and June 2016 for example) and not a representation of the overlying trend. It is important to point out that the pattern did NOT work here.