Mean Reversion or New Trend?

Louis Sykes
October 27, 2022

Bear markets are infamous for their counter-trend rallies.

Breakouts fail, and the charts are painted with false moves.

Throughout this bear market, traders have bought the breakouts to then dump the next day into an illiquid tape.

Given the gains we've seen over the last few days, I think it's important we step back.

To do this, I think Ethereum running up against its May 2021 lows is an excellent example.

If we're below these lows, it's rather difficult to get excited about this rally.

Guilty until proven innocent.

At worst, we're still dealing with a bear market. At best, it's a sideways, choppy mess.

When we get above those lows, we can reevaluate.

Until then, you have to say this is just another one of those fake-out moves.

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