While a strong bull action took the bitcoin rate up by 22 percent this week, there is still a strong likelihood of the cryptocurrency shedding all its gains. Pre-Halving Bitcoin Crashes The sentiments come in the form of a compelling historical pattern brought to notice by Jacob Canfield. TradingView’s top crypto analyst said bitcoin could fall towards $5,000 ahead of the May 2020’s halving event, noting the cryptocurrency’s eerily similar price behavior on the last two occasions. In retrospect, traders’ appetite for bearish positions surged in the months leading up to the last two halvings. That translated into a steady decline in the bitcoin price. Before the day of the first halving, for instance, the bitcoin-to-dollar exchange rate had fallen by up to 27 percent. Bitcoin price movements before and after halving events | Source: Jacob Canfield, TradingView.com Similarly, the second halving saw two separate price crashes of 27 percent each ahead of its occurrence. Each time the price slipped, traders located a solid accumulation area – support – towards bitcoin’s 200-daily moving average (MA) slope. The result was a new upside price rally every time, one of which includes bitcoin’s euphoric bull run towards now what is an all-time high of $20,000. Rinse and Repeat In the current scenario, the 200-daily MA has flipped to become a potent dynamic resistance level, which falls near $9,950. For this analysis to be wrong, I would need to see a daily close ABOVE the 200MA and $10,000 to make a higher high and invalidate the total structure,” said Mr. Canfield. “We can still pump up to $9950 and still be on pace for this analysis if we close below the 200MA.” Mr. Canfield, meanwhile, brought in the exponential version of the same MA that throughout 2018 served as a strong resistance on weekly charts. Even this week, the bearish slope turned down bitcoin’s latest upside attempt, as shown in the chart below. 200 MA resistances | Source: Jacob Canfield, TradingView.com “We can see is the former 2018 [rally] highs are eerily lined up with our rally highs,” the analyst added. “And the slope of the 200MA has recently turned down and we are currently below it […] For that reason, it makes sense to me that this may be a repeat from before.” He also called the 2019 high of $13.8K for its high sell-off capitulation volume. And how each one of the downtrend’s lower high was coinciding with the 200MA slope. “We have not yet seen the sell off capitulation volume like we saw before and we have been making lower high after lower high from the $13.8k level. It is possible that we range for the next several months forming more lower highs until we get a $6400 level break down to $5k.” The post appeared first on NewsBTC.

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