After facing a constant stream of buying pressure that led Bitcoin’s price to climb as high as $9,550, BTC faced a large influx of overnight selling pressure that sent it reeling down to lows of $9,200 before it found some support.
The sharp decline from $9,550 does make this 2020 high look like a local top for the cryptocurrency, and it is a strong possibility that the crypto sees some further short-term downside.
In spite of this, one eerily accurate fractal pattern formed between May and June of 2019 that BTC has been closely following is suggesting that BTC may now enter a consolidation phase before moving up towards $12,000 in an explosive movement.
Bitcoin’s Rally Stalls After Firm Rejection at $9,550
The overnight decline from these levels led the crypto to erase all the gains that came about in the later part of this week, when BTC raced from lows of $9,200 on Wednesday to its recent highs of $9,550.
Although this latest pullback hasn’t been too deep when the magnitude of Bitcoin’s recent gains is kept in perspective, it is important to note that it marked a break of the crypto’s bull trend on its 4-hour chart.
Big Cheds, a popular cryptocurrency analyst on Twitter, spoke about this in a recent tweet, while pointing to a chart showing the key EMA levels that Bitcoin just broke below.
— Big Cheds (@BigCheds) January 31, 2020
This Fractal Suggests BTC Could Soon Rally to $12,000
One factor that investors should keep in mind is that BTC has been closely tracking the price action seen in May-June of 2019, with the eerily similar price action suggesting that the crypto could now see a short bout of consolidation before moving up towards $12,000 in an explosive movement.
Galaxy, another popular crypto analyst, spoke about this fractal in a recent tweet, noting that BTC could soon break the $10,000 barrier and move to $12,000 after a short period of trading sideways.
“Today & May-June ’19 similarities are interesting to watch. By looking at this fractal, we are now in a consolidation before entering the next bull move & break the $10K barrier. RSI also bounced in the exact same area as it did back then,” he explained.
Today & May-June '19 similarities are interesting to watch.
By looking at this fractal, we are now in a consolidation before entering the next bull move & break the $10K barrier.
— Galaxy (@galaxyBTC) January 31, 2020
If this fractal continues playing out, then Bitcoin may soon see a rapid – albeit potentially brief – parabolic surge into the five-figure price region.
Featured image from Shutterstock.