The Case For Why $6,400 Wasn’t Bitcoin’s Local Downtrend Bottom

Tony "The Bull" Severino

5 years ago

3 mins read

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The cryptocurrency community is currently exploding with exuberance, as Bitcoin may have broken out from its recent downtrend into a full-blown reversal, and the rest of the crypto space has seen altcoins going on hundred percent rallies reviving talk of a bull run once again.

However, there are a number of similarities between the current rally in Bitcoin markets compared to the July 2018 rally, which could suggest that $6,400 wasn’t Bitcoin’s bottom, and a deeper breakdown will arrive the weeks ahead. Here’s the case as to why $6,400 wasn’t the bottom.

$6,400 May Not Have Been Bitcoin’s Bottom, If Fractal Confirms And History Repeats

Top analysts within the cryptocurrency industry, see many similarities between the current price action within Bitcoin’s recent rally from lows around $6,400, and a rally that took place back in July 2018.

The similarities between the two are uncanny and could act as a plausible case for why Bitcoin hasn’t bottomed, indicating that $6,400 was just a false bottom designed to give traders hope – hope that ultimately gets shattered, causing capitulation before the real bottom is put in. The flip-flopping in sentiment would be the psychological beating necessary to cause even the strongest hands to fold when the “bottom” eventually breaks.

More detailed thread on why I still believe $6400 was a false bottom.https://t.co/VL42uLwH0c

— A Voice of Reason in a Sea of Insanity (@sometrader78) January 16, 2020

As one expert crypto analyst points out, both the July 2018 rally and current rally were the result of an inverse head and shoulders formation confirming.

On larger timeframes, the monthly MACD is crossing over currently as did back in July 2018. The Relative Strength Index on the weekly and three-day timeframes are reaching similar areas on the gauge as it did back in July 2018 also. In both instances, there was a break of the 21-week EMA that didn’t end up holding.

Interestingly, the timeframe from the most previous rally top to the active rally top was roughly the same distance from April 2018’s top to July 2018’s top – roughly 80 days. And the time distance from the initial parabolic rally top to the current rally during both cycles was roughly 200 or so days.

There’s also a bearish divergence on the RSI on daily timeframes, dating back as far as the prior two peaks – just like the last time around.

While it is only possible to say that a bottom is in in hindsight, it’s understandable as to why many analysts believe the bottom is in. Bitcoin did confirm a common bottoming pattern, and broke through downtrend resistance, however, given all of the above similarities, it’s wise to approach any future price action with caution, as the bottom may not be in, and Bitcoin could break down to set new lows.

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.