An Analysis of potential profit based on Yearly Pivot levels for the Crypto market
Just like the long title above, this is a simplified analysis of pivots based profit potential that relies on targets derived from floor pivot indicator — one of the few forward predicting price indicators out there.
With the new year opening we are also blessed with the ability to calculate new Floor Pivots for different crytpo assets. This in turn can plot for traders and investors a yearly map for those crazy things that price might just do and point to where will it do them.
But first, if you are new to Pivots and/or crypto markets, here is a chart for you (if you are not new to Pivots please feel free to skip forward):
The Pivot rule of thumb is simple: Above Pivot (P)- Bullish expectations. below Pivot - bearish expectations. Also, The R’s are levels of Resistance while the S’s are levels of Support. Good, now you know Pivots.
And now that you know Pivots, take a look again at the chart and realize what a big part they play in the life of Bitcoin. Back in 2017, the year opened with price hanging above the Yearly Pivot. Such an opening would imply to traders & investors that they can expect, on the yearly time frame, at least a move to the Yearly R1. At best, they could have hoped to reach for the clouds where the R5 was promising sweet returns. The fact that the price of Bitcoin just flew past the R5 was a heavenly bonus to those who anyhow expected bullishness based on the Pivot system.
Another look at the end of 2018 reveals the principle that this indicator is named after, or where the price of Bitcoin Pivoted after a bloodbath bearish year. It was there at the Yearly S1 where the smart money was waiting for THE buy. The Bullish expectation for the following year was at least a touch of the Yearly Pivot. When that broke, the expectation became a touch of the Yearly R1- where price indeed got rejected in 2019.
Great, so what about that title with the potential profits for this year?
Now that we understand that pivots allow us an easy way to calculate bullish or bearish targets for the year, we have to also understand that not all targets are created equally.
This is the beginning of 2017 for Bitcoin. Price was above the yearly Pivot, hence expectations were bullish. The lower Target for the cautious trader was the R1 offering an upside of a delicious ~30%, while the moon target on the R5 was offering 191%. Joy!
But wait, let’s have a look at Ethereum! Opening also in a bullish setup, ETH offered traders / investors an initial bullish target on the R1 returning 90% and a dreamy creamy R5 target bearing 466%. As a trader looking at the Yearly Pivots of both Bitcoin and Ethereum, you’d have to ask yourself if this can effect your portfolio allocation?
Back to the here and now and what it might promise
After doing the hard manual work, these are some interesting Targets and returns you can hope to expect in the Year 2021 based on floor Pivots. Remember this is NOT a trading advice and the ability to look into the future is not something I posses. This system promises nothing. But IF you believe in the magic of Pivots you might want to build your portfolio with a reasonable mix of a higher upside probability on certain Crypto assets.
And without further Ado:
- All values are approximate not absolute
What does this all mean?
Mostly nothing, but we can learn a few things.
For example, if you believe DOT will decide to cross the Yearly Pivot into the bullish territory, it currently offers a very lucrative upside both to the R1 & R5. One can also claim that those Defi coins like Sushi, CHR & Comp might seem more exciting than the Ruling “old school” big caps. And as for those old guard, those who are in bullish territory seem to offer similar returns on the R1 ~30% to 50% and ~230% to 350% on the R5. Those who are still below their yearly Pivots offer higher upsides but most likely with higher risks of falling behind or failing completely.
And lastly, if you believe in miracles, XRP is offering the highest upside from the old guard. But good luck with that…