Last week, Bitcoin (BTC) plunged like a stone in water, falling through the $10,000, $9,800, and $9,500 price supports in rapid succession. But on Monday — Labor day for the U.S. and Canada — the cryptocurrency mounted a strong recovery, surging by 7% on the day.
As of the time of writing this, Bitcoin is trading at $10,400. And, one fractal from a prominent analyst shows that the crypto’s bullish momentum won’t be letting up anytime soon. Let’s take a closer look.
Bitcoin Fractal Implies Further 10% Rally Inbound
Earlier Monday, this writer posted an article about Bitcoin’s price jump with the image below.
If it looks familiar, don’t worry. As this writer and many others have noticed, Bitcoin’s recent price action has resembled that was seen at the end of 2018, when BTC tumbled under $4,000 and made many investors fear that the cryptocurrency’s time had come.
This implies that should history repeat, Bitcoin still has room to run, even though the momentum, for now, seems to have been entirely exhausted.
He pointed out that should history repeat, meaning Bitcoin’s historical price action playing out on this smaller time frame, BTC will hit $11,500 in the coming week. This fractal, which is a bump and run reversal (BARR) bottom pattern, implies around 10% upside from the current price of $10,400.
For those who missed the memo, the bump and run reversal bottom is a textbook pattern popularized by analyst B.Biddles in April.
The structure is described as a steep “drop-off” following a lead-in phase. After that, the price moves in a narrow range before pushing higher, creating a rounded “bump” bottom before making a “run” upward.
BTC Bottom: Electric Boogaloo
This isn’t the only evidence showing that Bitcoin is now looking as it did during December’s $3,150 bottom. As the below analyst recently pointed out, the sentiment seen prior to this recent upturn is very reminiscent of late-2018, with many calling for $7,000 after a steep drop from $10,200.
Not the biggest fan of fractals but I'm always interested in price behaviour and sentiment. It's all feeling a bit familiar on Bitcoin at the moment
Jan 19 – People waiting for $1,000
Sep 19 – People waiting for $7,000
What if? pic.twitter.com/NdU054UAAE
— Mr. TA (@Trader_M4tt) September 1, 2019
Indeed, the Bitcoin Fear and Greed Index has recently started to reach levels of “extreme fear”, flirting with levels under 10 for the first time since the bottom in December.
While this number may seem entirely arbitrary, especially considering the bullish momentum Bitcoin has experienced in the first half of 2019, the index’s readings are backed by data.
The website that hosts the index claims it analyses a fair mix of volatility, market momentum and volume, social media trends, surveys, dominance, and Google Trends to get the gist of how cryptocurrency investors are faring.
To put it short and sweet, Bitcoin investors have recently been as fearful as they were during the bottom. And, with many believing that this market moves against the majority’s sentiment, a further move higher just might be inbound.
Featured Image from Shutterstock