Bitcoin Fractal Hints At Six More Months of Downtrend, Worst To Yet Come

Tony "The Bull" Severino

1 year ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Crypto market sentiment is the most bullish its been this year thus far, and the most bullish for Bitcoin since the historic October 2019 rally that set the record for the asset’s third-largest single-day gain.

However, while bulls are celebrating early that the downtrend is over, a fractal from 2018 could suggest that there’s going to be another six months of crypto winter and that the worst of the current downtrend is yet to come.

Frightening Bitcoin Fractal Is Crypto Investors’ Worst Fears

Starting in December, Bitcoin price repeatedly tested lows around $6,500, forming an inverse head and shoulders pattern that has since confirmed and driven Bitcoin to as high as $8,450 last night before a slight retracement began.

The first-ever cryptocurrency continues to trade above $8,000, currently around $8,300. The leading crypto asset by market cap holding above $8,000 is considered extremely bullish, and it’s convinced the crypto community that the current downtrend has finally come to an end.

The Relative Strength Index is showing a clear breakout of a downtrend, however, at the same time the indicator is signaling that Bitcoin is far more overbought now than it was during the October, China news-driven pump.

$bitcoin fractal$

However, the current price action appears to be eerily familiar and nearly matches up perfectly with a fractal dating back to July 2018. And if the fractal is legitimate and plays out, not only is Bitcoin’s current downtrend not over as many believe, but the worst is still yet to come.

$bitcoin fractal$

Back in July 2018, Bitcoin touched a low of $5,800 forming the head on a massive, inverse head and shoulders pattern. Once the pattern confirmed, the crypto asset rocketed to $8,450 where the rally came to a halt – the same price level where last night’s rally stopped.

The resulting peak made a lower high in price, but a higher high on the RSI, forming a bearish divergence. The same exact divergence has also appeared on the RSI on current daily timeframes as well, suggesting that the rally could be over, and another drop is ahead.

$bitcoin fractal$

The fractal would also hint at six more months of downtrend, and a retest of 2018 bear market lows near $4,200, where the breakout initially occurred back in April 2019.

While there’s no denying the price action and indicator signals are eerily similar, there are a number of unique factors that could suggest that this time is different. A brewing war between the US and Iran could cause investors to flight to Bitcoin as a safe haven asset, and with two full years of downtrend now behind us, selling is likely far more exhausted than it was back in July 2018, just six short months after the crypto bubble popped.

Charts via TradingView

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.