Ugly With A Positive Edge
The Stats Behind Bitcoin's Current Swoon
IN TODAY’S REPORT
What we cover: STATS EDITION. Stats when Bitcoin sheds 10% or more inside 3 days while closing down for all 3 days.
TODAY’S STATS
The Super-tight Range Resolves
It’s ugly out there. Bitcoin’s super-tight February trading range — recently shown through the lens of my Rangeometer indicator — clearly suggested a meaningful price move was incoming, but despite past analogs it’s a punch-in-the-gut break to the downside.
The current Bitcoin chart below (afternoon NYC time, 2/26/25) shows the king crypto in its 3rd straight day down and just above its rising 200ma.
BITCOIN (BTC/USD). Bitcoin falls >= 10% as it closes down for 3 straight days.
Before I get to the stats, here’s the last time this setup occurred in summer 2024.
BITCOIN (BTC/USD). BTC falls >= 10% as it closes down for 3 straight days. 2024.
So what does Bitcoin’s recent history tell us about what’s happening right now? Let’s dive in!
First I’ll define the current technical setup with two conditions while employing a 90-day hold time, looking only at modern history from 2015 - the present. This avoids large outlier gains from Bitcoin’s early years.
BITCOIN SETUP CONDITIONS
CONDITION 1: Bitcoin closes lower for 3 straight days
CONDITION 2: Bitcoin declines by 10% or more within 3 days
EXIT CONDITION
Sell 90 days laterBITCOIN (BTC/USD). Hypothetical Trades. 2 Conditions. 2015-Present.
OBSERVATIONS
Performance Summary
Total Trades: 23
Winning Trades: 14
Losing Trades: 9
Win Rate: 60.87%
Profit & Loss Breakdown
Average Gain: +46.29%
Average Loss: -24.12%
Average Trade: +18.74%
Max Gain: +174.34%
Max Loss: -43.97%
Key Takeaways
✅ Winners are nearly 2x the size of losers on average
✅ Positive Expectancy: With an 18.74% average return per trade, these conditions have an edge over a 90-day time window
✅ Profit Factor of 2.99 indicates a solid upside edge over time
⚠️ A max loss of -43.97% indicates occasional large drawdownsBITCOIN SETUP CONDITIONS
CONDITION 1: Bitcoin closes lower for 3 straight days
CONDITION 2: Bitcoin declines by 10% or more within 3 days
CONDITION 3: Bitcoin's 200-day moving average is rising
EXIT CONDITION
Sell 90 days laterBITCOIN (BTC/USD). Hypothetical Trades. 3 Conditions. 2015-Present.
OBSERVATIONS
Performance Summary
Total Trades: 16
Winning Trades: 11
Losing Trades: 5
Win Rate: 68.75%
Profit & Loss Breakdown
Average Gain: +53.20%
Average Loss: -20.49%
Average Trade: +30.17%
Max Gain: +174.34%
Max Loss: -43.97%
Key Takeaways
✅ Winners are nearly 2.6x the size of losers on average
✅ Positive Expectancy: With a +30.17% average return per trade, these conditions have a strong edge over a 90-day time window
✅ Profit Factor of 5.71 indicates a powerful upside edge over time
⚠️ A max loss of -43.97% indicates occasional large drawdownsAs I write this, Bitcoin is down roughly -10% for the year. Climactic volume indicating a potential market puke point? Not quite there <sigh>. The rough seas may get rougher, at least in the near future.
If this turns out to be a cycle top, it will have failed to give many if not most of the classic cycle sell signals. The stats are compellingly bullish, and I personally remain bullish for BTC’s cycle prospects.
Until next time…
peace_love_crypto-DB
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