Time To Pay Attention: Bitcoin Indicator Behavior Mimics Historic Rally

Tony "The Bull" Severino

1 year ago

3 mins read

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Bitcoin price keeps sinking, but has kept mostly sideways leaving bears unable to break support to new lows. With the trading range at a pivotal point, as one trading legend often says it is “time to pay attention.”

The reason for the focus, is because what started as a fractal in price action, is now causing similar behavior in the Bollinger Bands that led to one of the most powerful pumps in Bitcoin history. Is that what’s next with bearish sentiment at such critical heights currently?

Pause In Downtrend Leaves Traders Confused, Market In Fear

Markets are cyclical and oftentimes sentiment lags behind price action. The recent uptrend in cryptocurrencies came to a pause when things were at their best – just as Coinbase Global went public, and prices were at all-time highs.

It wasn’t until more than 50% from the price per BTC was shed before investors started to become bearish on Bitcoin. Over the last several weeks since the big drop in May, a symmetrical triangle has been forming but it might not play out the way text book technical analysis would suggest.

The Bollinger Bands closely match the "China pump" from 2019 | Source: BTCUSD on TradingView.com

Sentiment is at extreme fear and a technical indicator that can be used to forecasts bounces, the Bollinger Bands, looks a lot like the last time the market reached a pause in a new downtrend like this.

At that time, the creator of the tool, John Bollinger, warned it was now “time to pay attention” as trickery could soon reveal, and reveal it did.

Bitcoin “Squeeze” Could Lead To Epic Pump

With sentiment at the very worst and a sweep of lows now checked off the list, Bitcoin price could pump back higher to either retest or reclaim previous highs.

Price action has repeatedly wicked into the lower Bollinger Band without a big break, suggesting that this latest test of the lower band is a bear trap setup called the “Gimmee Bar” discovered by Joe Ross.

Several wicks into the lower BB suggest a bear trap | Source: BTCUSD on TradingView.com

In 2019, the top cryptocurrency couldn’t recover the lost level, but the bull market is a lot different this time around. Holding the level here would result in the first major bull market correction of the rally continues from here.

If the level cannot be reclaimed, much like the China pump of late 2019 failed and led to new lows, so too will any unfinished recovery from here. Regardless of what happens, it is worth paying extra close attention the next several days until Bitcoin price choses a new direction.

Featured image from iStockPhoto, Charts from TradingView.com

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.

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