Over the past few weeks, Bitcoin (BTC) has been consolidating in the range around $7,000, seemingly stuck in between a rock and a hard place. Indeed, the cryptocurrency has many times bounced in the mid-$6,000s, where there is macro support, and has been rejected multiple times in the resistance band around the high-$7,000s.
Related Reading: Why Bitcoin Is Poised to Rally 25%, Spring Past $9,000 In Coming Weeks
According to an eerily accurate fractal pointed out by a cryptocurrency trader, Bitcoin will need to break higher soon, or else a strong drop towards the $3,000 range may soon take place.
Bitcoin Fractal: BTC Prime to Fall to $3,000
Cryptocurrency trader Mr. Chief recently posted the below tweet, noting that Bitcoin’s price action since the start of 2019 is eerily reminiscent of the chart of the stock of AMD from 1991-1992. Both charts, he pointed out, saw a strong rally higher, a parabolic peak, a consolidation defined by a descending triangle, a fake breakout above the hypotenuse, and an inverse head and shoulders — a classical bottoming pattern.
In the case of AMD, its price broke below the inverse head and shoulders pattern, plunging by 50% in the weeks that followed.
The fate of Bitcoin’s inverse head and shoulders pattern is currently undecided. But if it follows AMD, the price of the cryptocurrency will collapse towards $3,000 in a rapid amount of time, likely creating an extended bear market phase that will ruin bulls.
$BTC Thoughts
Low time frames look decent for a bounce. Personally, I really want to see a follow through on this IH&S in the very near future. If not, I think momentum could run dry very quickly
Be careful folks. Still at resistance. Don't get too cocky about this move…yet pic.twitter.com/8Wa4r6xcxK
— Mr Chief (@HaloCrypto) January 3, 2020
The fractal’s directionality lines up with the on-chain data which suggests that Bitcoin investors have yet to complete a historical trend seen in any full-fledged bear market.
Per previous reports from NewsBTC, the SOPR (Spent Output Profit Ratio) indicator — an indication of the average Bitcoin holder’s profitability — suggests Bitcoin has not yet seen a capitulation event for the current cycle, implying that the crypto market could see one strong dip before a return to a bullish phase.
Related Reading: Why Bitcoin Investors’ HODL Mentality Means a Price Surge Is Coming
The Bull Case
Bears may be in control of the narrative due to Bitcoin’s performance over the past few months, but a growing sentiment is that BTC upward breakout is imminent.
Su Zhu, the chief executive officer of forex and crypto fund Three Arrows Capital, recently remarked on Twitter that he believes Bitcoin’s price outlooking heading into 2020 is looking rather bullish. The prominent commentator specifically cited his analysis of the BTC/USDT trading pairs and their premiums to BTC/USD markets and the overall price action, which shows there are “clear signs of accumulation and money flow back into risk.”
BTC/USDT premiums and price action show clear signs of accumulation and money flow back into risk.
Would not surprise me to see 9K+ before end of Jan.
— Su Zhu (@zhusu) December 28, 2019
And also, analysts like Velvet and Financial Survivalism have suggested BTC is currently in a textbook Wyckoff Accumulation pattern. Per the pattern, Bitcoin is in its final shakeout lower, evidenced by the drop to the $6,800s.
So should this textbook technical analysis pattern play out exactly as the studies of Richard Wyckoff, a noted technician, says, BTC is likely to break $9,000 and maybe $10,000 by the end of January.
Related Reading: Bitcoin Poised to Collapse Under $5,000? Market Cycle Fractal Suggests So
Featured Image from Shutterstock The post appeared first on NewsBTC. origin »
Since plunging to $6,400 around December 18th and rocketing back to $7,000 the day later, Bitcoin has stalled, flatlining in the low-$7,000s as the market remains largely directionless. Related Reading: Why the Bitcoin’s Bearish MACD Cross May Not Plunge Price But on Saturday, BTC started to show that it had room to run, with the... The post appeared first on NewsBTC.
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Since yesterday, Bitcoin has been making a recovery as it goes back to the $8,000 level. Currently, BTC/USD is trading at $7,967 with 24 hours loss of 0. 08 percent. At the end of last month, Bitcoin dropped down from the highs of $9,100.
The price of bitcoin closed a touch firmer this week at around $3,950, inching close to the $4,000 resistance level it has been struggling to surpass. The market sentiment seems to be changing, and it looks like the crypto winter could be over soon.
Shortly after falling from its test of the low $4,000s, bitcoin managed to find support in the mid $3,500s. This has proven to be a relevant level over the last few months, and finding support here would be a sign of relatively strong demand:Figure 1: BTC-USD, Daily Candles, Local SupportThe high candle spread rejection following our test of the low $4,000s was an indication that we had strong levels of supply left in the market, but for the time being we are holding support.
After weeks of consolidation, bitcoin finally broke through support. The market now finds itself cruising toward prior lows. On expanding volume and spread, the bitcoin market appears ripe for a continuation of the downtrend:Figure 1: BTC-USD, Daily Candles, Broken SupportAlthough the current daily candle has yet to close, unless there is a strong influx of demand hitting the market, it stands to reason that bitcoin will be closing a new daily low for the first time since mid-December.
For the better part of a month and a half, bitcoin has been fairly range-bound and unable to establish new lows or new highs. There are some bullish and bearish setups on the horizon for bitcoin, so let’s check out both sides of the argument because currently the market is sitting in the middle of Indecisionville — the most immediate sign of which is this glaringly obvious head-and-shoulders bottom reversal pattern:Figure 1: BTC-USD, Daily Candles, Head-and-Shoulders BottomThis current pattern is nothing more than a setup at the moment, but it represents one potential outcome of this sustained consolidation.
This week realized a big gain as bitcoin enjoyed a 25% rally from its local bottom before topping out around $4,400. Support currently appears to be established in the mid-$3,000s as the market remains indecisive over its next move:Figure 1: BTC-USD, Daily Candles, Current Support LevelFigure 1 shows the relevance of the current support level as it represents a previous support level that was never properly retested during last year’s parabolic bull market.
Once again, bitcoin finds itself precariously perched on the bottom of its macro trading range (TR). After a strong round of selling over the course of two weeks plunged the price back to the $6,000s, bitcoin began consolidating for several weeks at the bottom of the TR:Figure 1: BTC-USD, 1-Day Candles, Macro TRAs shown in the figure above, the market has interacted several times at the current price range and it has been a source of three major bullish rallies.
A sideways market has many bitcoin investors wondering if the downward volatility has finally subsided. As stated in our previous discussion of the bitcoin market, the $6,425 support level was a very important level to hold.
In the previous BTC-USD market analysis, we discussed a macro pattern forming, called a “symmetrical triangle. ” A symmetrical triangle (shown in red) is a directionally agnostic consolidation pattern.
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