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Bitcoin trading system's results. When you measure the relative strength (RS) of Bitcoin tech stocks or other cryptos and key financial markets, you obtain a real-world view of its comparative strength (or weakness). This data can help you make important investment decisions. It can even help you forecast major reversals, allowing you to jump to other investors.
This article will show you the RS of Bitcoin vs. tech stocks (ticker: QQQ, the NASDAQ 100 tracking stock) over six key time periods. You'll see how BTCUSD will be against QQQ during the past 3-, 6-, 12-, 24- and 36-month periods. QQQ over the past five years. Any market that can outperform a stock index containing the likes of Apple, Netflix, Amazon, and Google is a market to respect. In Bitcoin's case, it's been trouncing those particular tech-index giants for the past five years.
Bitcoin vs. Tech Stocks: Key RS Metrics
The Bitcoin (BTCUSD) vs. QQQ RS stats since December 2017's all-time-high (ATH) are clearly stacked in favor of QQQ. At least right now. In other words, it can be used to change direction in a flash, rendering even the best-researched forecasts useless. However, both BTCUSD and QQQ are in technical bear markets now. Additionally, QQQ's monthly chart looks especially for some market technicians. In tech stocks in 2019, many are calling for even lower lows.
BTCUSD's timing forecast charts that January 2019 could see a major rally erupt from a series of simultaneous cycle lows. In contrast, QQQ's cycle charts suggest a potential bullish reversal far later, sometime in late Q1 or even Q2 of 2019.
Near-Term Stats (One Year or Less)
3-month BTCUSD performance: (44.60) percent
3-month QQQ performance: (17.64) percent
RS ratio of 2.53 to 1 in favor of QQQ
6-month BTCUSD performance: (39.55) percent
6-month QQQ performance: (9.83) percent
RS ratio of 4.02 to 1 in favor of QQQ
12-month BTCUSD performance: (75.89) percent
12-month QQQ performance: (2.23) percent
RS ratio of 34.02 to 1 in favor of QQQ
BTCUSD and QQQ, weekly: Although QQQ had a clear relative strength advantage over QQQ for most of 2018, the balance of power may now be turned into Bitcoin's favor. Image: NinjaTrader 8.
Bitcoin's trail since late December 2017. QQQ, although actually down to couple percent since then, has actually outperformed BTCUSD by a factor of 34 to 1 over the past twelve months. 2.03 to 1. As mentioned earlier, the 2019 cycles forecast for BTCUSD also has the potential to turn the coin into a QQQ outperformer in the coming year. Extreme RS ratio figures are generally not sustainable, typically reverted to the mean. Later in the article, you can identify what extremes in RS can set up powerful investment opportunities.
Long-Term Stats (Two Years or More)
24-month BTCUSD performance: + 295.90 percent
24-month QQQ performance: + 26.68 percent
RS ratio of 11.09 to 1 in favor of BTCUSD
36-month BTCUSD performance: + 777.86 percent
36-month QQQ performance: + 36.01 percent
RS ratio of 21.60 to 1 in favor of BTCUSD
5-year BTCUSD performance: + 418.13 percent
5-year QQQ performance: + 74.87 percent
RS ratio of 5.58 to 1 in favor of BTCUSD
Apples Vs. Crypto
You do not need to be a rough time for Bitcoin investors. However, looking at the RS of the coin across the most recent 2-, 3-, and 5-year periods suddenly transforms it into a superstar. This was particularly good in the 3-year lookback period, outperforming QQQ by more than 20 times!
Key NASDAQ 100 Components Underperform
If you had invested in shares of Netflix (NFLX) and BTCUSD on December 27, 2015, your crypto units would be more significant than your NFLX stake:
36-month BTCUSD performance: + 777.86 percent
36-month NFLX performance: + 120.00 percent
RS ratio of 6.48 to 1 in favor of BTCUSD
Here's a look at the 3-year performance comparison of Google (GOOGL) vs. BTCUSD:
36-month BTCUSD performance: + 777.86 percent
36-month GOOGL performance: + 34.40 percent
RS ratio of 22.61 to 1 in favor of BTCUSD
Seeing the Forest for the Trees
Eventually, Bitcoin's bear market will end. QQQ in 2019 and beyond as new futures contracts and exchanges draw more investor interest. Rising price cycles may also coincide with that renewed public focus on the coin.
Currently, QQQ is outperforming BTCUSD (most recent 12-month period) by an RS factor of 34 to 1. Think about that for a moment. Unless BTCUSD is soon destined to become worthless or QQQ is going to hit extreme new ATHs soon (both scenarios extremely unlikely), that outlandish RS ratio seems unsustainable.
While novice investors are focused on what has happened, you may choose to look at that inflated RS happening. Here's a recent BTCUSD monthly cycles forecast chart, followed by another chart for QQQ. Cycles analysis suggests that BTCUSD is much closer to making and sustaining than bullish trend reversal than is QQQ:
BTCUSD, monthly: Bitcoin is now trading in bar 12 of a typical 16-bar monthly cycle. Manifests signs of bear exhaustion. Image: MotiveWave Ultimate.
A look at QQQ's monthly cycles scenario, which is extremely bearish:
QQQ, monthly: A typical bear half-cycle lasts at least five to eight bars. Presently, QQQ is expected to be completed in 2019. Bitcoin may be a superior investor alternative to QQQ in 2019. Image: NinjaTrader 8
Relative Strength Extremes and Cycles
Relative strength comparisons clearly show you what markets are leaders and laggards. Extreme bullish or bearish RS ratios can also provide you with an early warning of a major reversal. That's one of the most opportune times to put cycle analysis to work. Remember that cycle analysis is not a perfect mathematical science.
It can help you make investment decisions at times of extreme intermarket imbalance. In the above examples, the probabilities favor the outperforming QQQ well into 2019. Doing your own research.
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