Bitcoin has found itself in the middle of nowhere yet again.
The cryptocurrency has been stuck in a tight range, with breakouts on either side failing as investors have been exuding feelings of indecision. The market is so indecisive that on Tuesday morning, a “Darth Maul” candle formed, whereas
Blockware Mining chief executive Matt D’Souza summed up the market trends well in a recent tweet when he wrote:
“What’s interesting is bitcoin has stayed in a range I call ‘purgatory’. 8k-11.5kish.”
An analysis shows that BTC may be poised to break lower, with a popular trading noting how the recent price action looks much like that seen at February’s $10,500 high.
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Bitcoin Is Likely Topping Out, Historical Analysis Shows
A trader recently noted that Bitcoin’s price action over the past two weeks, with the breakout attempt at $10,400, looks almost identical to the formation that marked the $10,500 highs in February.
He shared the chart below illustrating the similarities with the following comment, which suggests BTC could soon dive lower:
“Bitcoin already had something similar before: a very specific fakeout shape followed by a lot of the squeezes in both directions.”
Not the Only Sign of An Imminent Peak
The trader’s historical analysis is far from the only signaling indicating that the Bitcoin market is rapidly approaching a peak.
One trader shared the chart below on June 6th with the following comment:
“What’s the difference between the top at 19k, 13k, 10.5k and now?”
The chart depicts that Bitcoin is currently nearing the top of the one-week Bollinger Bands — an indicator basically showing how far an asset deviates from a baseline trend. This is important because the last three times this was seen are as follows:
- When Bitcoin topped at $10,500 in February of this year.
- When BTC surged to $14,000 in June of 2019.
- And when the cryptocurrency exploded to $20,000 during the crypto mania of 2017.
Historical precedent would suggest that BTC reaches a top soon.
Fundamental Trends Still Decisively Positive
Notably, multiple market fundamentals show that Bitcoin is still bullish.
As reported by NewsBTC, BTC blocks are currently being mined on average at their fastest rate since June 2014. This trend accentuates that cryptocurrency miners are optimistic about the prospects of the network.
This is important for short-term price action as the high amount of activity confirms that the “miner capitulation” that many feared did not come to fruition. “Miner capitulation” is a coin termed by analysts expecting miners to liquidate their Bitcoin all at once should they run into profitability issues.
Adding to this, the stock market continues to rally towards all-time highs. While it has been said that BTC is not correlated with equities, it is hard to argue that cryptocurrencies do not benefit from a booming stock market.
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Last Time This Formation Was Seen, BTC Peaked at $10,500. It's Back Again