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Bitcoin price only recently broke out from a tight trading range, causing a roaring rally by crypto bulls, pushing the asset to $12,000 per BTC. But even though sideways just ended, a fractal appearing on the asset’s price charts suggests that a crash is on the way, followed by much worse: more painful sideways.
The Crypto Market’s Rollercoaster Ride of 2020
2020 has been a rollercoaster for Bitcoin unlike no other. The crypto asset went from trading at around $6,500 to $10,000, then collapsed to $3,800 in the Black Thursday. Days ago, it touched above $12,000 and analysts are now targeting a retest of $13,800 before another attempt at $20,000 is made.
Related Reading | Economist: Early Days of Bitcoin Uptrend Are Here, Breakout Has A Long Way To Go
But bulls may be getting far ahead of themselves with more upside targets so soon. Although volatility has only just returned, another boring lull may be ahead. A fractal matching the last consolidation phase has already appeared, closely mimicking recent price action.
And if price action continues to follow the fractal, another short-lived crash is ahead, followed by more max pain scenario: a return to extended sideways trading.
BTCUSD Daily Price Chart Sideways Fractal | Source: TradingView
Bitcoin Fractal Points To Return Of Sideways, Expansion Results In New All-Time High
Taking the same price action above, and superimposing the first red box into the second provides the path outlined for Bitcoin by the fractal. A continued crash to below $11,000 is likely to take place over the next several days, followed by a rally to new highs. A slow and sideways downtrend will take place until volatility fades again, and another upward breakout occurs.
BTCUSD Daily Price Chart Sideways Fractal | Source: TradingView
Fractals are a polarizing subject, with some analysts digging deep to discover them, while others claim they simply cloud bias. Adding more credence to this theory, however, is as similarly recurring pattern following Bitcoin’s last bottom.
A similar sideways period took place in late 2015 into early 2016. Bitcoin spent several months locked in a tight trading range before strong expansion.
BTCUSD Daily Price Chart Fractal 2016 Comparison | Source: TradingView
An enormous move took place, followed by a correction, and as you can see below, more sideways. After that, the bull run that put crypto on the map took place.
Related Reading | Crypto Is Up Over 80% in 2020—and Google Users Are Taking Notice
If a similar story takes shape across the crypto market, Bitcoin won’t see further upside until late September or early October at the soonest. However, according to 2016, that was the last stop before a new all-time high was set.
