How to differenciate a dead cat bounce from the end of the correction?

[ILoveOnions]

How to differenciate a dead cat bounce from the end of the correction?
This is exactly my question.
Is there someone with experience in Technical Analyses who can answer this?
Very relevant at this moment!

Cheers an Goodluck to all!
JJ

[NoviceInvestor]

My belief is that you can only differentiate the end of a correction from a dead cat bounce in hindsight. I.e. you have to wait and see whether prices continue downwards, or start consistently going up again. I think you're searching for an answer that no-one has.

[emuLOAD]

poke it and see if it meows

[vhooloo]

Bitcoin investor should not play with cats even dead cats. You must HODL since Bitcoin will go up. IN last five years, bitcoin always go down in January and then up the rest of the year.

[coinycoiny]

If it were shares then its normally the point at which you would get more return from sticking your money in the bank.

I.e the expected earnings per share is a higher percentage than you would get then depositing your money in a bank (minus a bit for the extra level of risk)

In the case of bitcoin, there is no earnings, in fact the opposite, as more coins are mined your actual holdings are being whittled away like a Nigerian government (but without the chance of a shady backhander)

In short, if bitcoin bounces, its a dead cat.

...or a parrot.

Dead.

[NoviceInvestor]

According to technical analysis, the corner may have turned when the stock drops, but doesn't pierce a previous lowpoint. However, I'm sure we've seen this already many times with Bitcoin, but then prices went lower again. So, it's anyone's guess.

[LeGaulois]

(This topic should be in the "trading section or "speculation")

It's not easy to explain but to make it short, in trading you can identify the end of a correction with the methods below:

- price breaks of a corrective highs in an uptrend or corrective lows in a downtrend
- corrective price channel breaks,
- an RSI-break back in the direction of the prior trend.

Read this page for the full explanation
https://www.dailyfx.com/forex/education/trading_tips/daily_trading_lesson/2014/03/06/Confirm_The_Correction_Break.html

and this one as well
https://www.dailyfx.com/forex/education/trading_tips/daily_trading_lesson/2013/10/18/Basic_Tenets_of_Elliott_Wave.html

Hope it helps otherwise another method to look for

poke it and see if it meows

[figmentofmyass]

My belief is that you can only differentiate the end of a correction from a dead cat bounce in hindsight. I.e. you have to wait and see whether prices continue downwards, or start consistently going up again. I think you're searching for an answer that no-one has.

yeah, it's only possible in hindsight.

you can get a feel for the probability of a long term bottom based on volume, whether major price support levels were tested, and the length of time spent in the downtrend. but no technical indicators can ever tell you in a predictive sense when the bottom will be in.

there's no point calling the bottom until you've actually seen an uptrend formed. by the time this happens, price will be nowhere near the lows anymore. this is basic dow theory.

[jubalix]

when it trades between two narrow levels for about 8 months to a year.

eg 4000~5000K

it was about 500~700 for ages or some such.

[djangocoin]

I guess you can't, the momentary recovery (the bounce) may be it recovering or just a foux recovery before dropping further. You can try and predict it based on your experience or maybe the charts etc., but you can't know for sure. Hindsight is the only way to know for sure

[Viper1]

How to differenciate a dead cat bounce from the end of the correction?
This is exactly my question.
Is there someone with experience in Technical Analyses who can answer this?
Very relevant at this moment!

Cheers an Goodluck to all!
JJ

You understand that crypto is not like normal stocks right? It's more like penny stock. Highly volatile, high highs, low lows, and easily manipulated.

[ILoveOnions]

I do indeed understand that TA doesn't always work for crypto.
Still I think it is valuable to look at the charts as the do reflect demand and supply and there is definatelly something to get there.
now seems a good time for buying as we backtested 9250 area. I am curious if we will test the 12000 level again......

I hope that the bottom is in @ around 6,000

Cheers!
JJ

[alyssa85]

How to differenciate a dead cat bounce from the end of the correction?
This is exactly my question.
Is there someone with experience in Technical Analyses who can answer this?
Very relevant at this moment!

Cheers an Goodluck to all!
JJ

Trading volume. If the rise up is accompanied by big trading volume, then it's real, there are substantial buyers. If the volume is thin, it just takes a few whales cashing out to send the price downwards again.

[vit05]

(This topic should be in the "trading section or "speculation")

It's not easy to explain but to make it short, in trading you can identify the end of a correction with the methods below:

- price breaks of a corrective highs in an uptrend or corrective lows in a downtrend
- corrective price channel breaks,
- an RSI-break back in the direction of the prior trend.

Read this page for the full explanation
https://www.dailyfx.com/forex/education/trading_tips/daily_trading_lesson/2014/03/06/Confirm_The_Correction_Break.html

and this one as well
https://www.dailyfx.com/forex/education/trading_tips/daily_trading_lesson/2013/10/18/Basic_Tenets_of_Elliott_Wave.html

Hope it helps otherwise another method to look for

poke it and see if it meows

Thanks for the links. The second have great explanation and it is easy to understand. There is another link, that is suggested in the text, that is necessary too https://www.dailyfx.com/forex/education/trading_tips/daily_trading_lesson/2013/10/10/3_Simple_Steps_for_Using_Fibonacci_to_Time_the_Forex_Market.html