The entire market is in complete panic and despair, and cryptocurrency holders that just watched Bitcoin price collapse back to levels not seen since a year ago are ready to capitulate and give up on the emerging asset for good.
However, this latest drop, as frightening as it may be, could be the last pitstop in a massive bullish pattern that has been forming over the last year of price action Bitcoin. This formation could very well be Bitcoin’s last hope of overcoming the coronavirus and remaining relevant.
Rare Chart Pattern May Be The Last Hope for the First-Ever Cryptocurrency
Bitcoin is the first-ever cryptocurrency. It started off its life worth next to nothing, but in ten short years grew from virtually worthless to over $20,000 at its peak.
Since that peak was reached, crypto investors have been buying up the asset in anticipation of the asset eventually being widely adopted and falling into favor as a currency, a store of value, or any of the other narratives surrounding Bitcoin.
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All signs were pointing to the cryptocurrency taking off into its next bull market just ahead of the asset’s halving in two short months from now, however, widespread panic over the coronavirus has caused all markets to collapse, including Bitcoin and the rest of crypto.
Following public concerns reaching critical levels and the virus achieving pandemic status, a major selloff took Bitcoin price from $7,500 to below $5,800.
Currently, Bitcoin price is trading above $6,000, but struggling to hold a level that was bought up with fury just one year prior.
Massive Year-Long Descending Broadening Wedge Could Take Bitcoin Price to $17,000
Bitcoin price hasn’t traded this low since the start of 2019.
And while things are certainly looking grim for the first-ever cryptocurrency and its future, this latest drop is headed toward a downward-trending support line forming the bottom of what appears to be an absolutely massive descending broadening wedge, which is traditionally a rare yet extremely bullish chart pattern.
Technical analysis is a subjective process and develops along with price action. Oftentimes a pattern isn’t visible until additional peaks and troughs appear.
These latest peaks and troughs accurately fit the description of the pattern provided by Thomas Bulkowski – the authority on chart patterns, known for having studied the performance statistics of certain patterns playing out on hundreds of thousands of price charts over the years.
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According to Bulkowski, the descending broadening wedge is “found most often with upward breakouts in a bull market” adding that “downward breakouts are rare.”
Targets are found by measuring the top height of the first peak, to the low of the most recent trough, then applying this at the breakout point. While we don’t know where that will occur yet, if it will at all, a theoretical target would put Bitcoin price at $17,000.