Building The Case For A Potential Bitcoin False Bottom

Tony "The Bull" Severino

1 year ago

3 mins read

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Bitcoin price action is fickle lately, moving mostly sideways with a number of unsuccessful breakout attempts. The fact that $30,000 simply won’t break brings back memories of bear market support at $6,000 – which after a full year finally broke down to the real bottom.

The leading cryptocurrency by market cap did something similar after the June 2019 peak, settling in around late December, but then sweeping lows with Black Thursday before finally moving higher. Could these clues help build a case for a false bottom currently forming in Bitcoin?

Remembering The Bear Market, Bakkt, And The Black Thursday Plummet

The last four years of Bitcoin price action have been a rollercoaster, and among the wildest ones ever. A speedy rise from under $1,000 to more than $20,000 capped off the 2017 rally, and sent all of the crypto market in the troughs of a bear phase.

Price action grinded for months on end against the same support, but decreasingly lower highs – a signal of a downtrend. A lower low was finally formed in late November 2018, when Bitcoin broke down to its bear market bottom.

From there, news about a potential Facebook-led cryptocurrency and the Bakkt cryptocurrency exchange drove the bullish narrative – and with it prices toward $14,000.

After the rejection, Bitcoin price action hovered sideways for another several months forming yet another false bottom. An early 2020 rally broke the downtrend, but again a false bottom gave way when all of crypto crashed on Black Thursday.

Will the pattern of false bottoms finally end?  | Source: BTCUSD on TradingView.com

Bitcoin Price At Risk Of Another False Bottom Fakeout

Bitcoin has once again found itself trading sideways, grinding against support that so far cannot be broken. Weeks worth of attempts have failed, and bears barely got a taste of below $30,000.

But that taste has bears salivating for more, and it is up to bulls to make sure Bitcoin doesn’t get there. The only problem is, the weekly Relative Strength Index has fallen to the level where in the past acted as the so-called “false bottom.”

When this phony bottom holds and a bounce follows, the rejection picks up enough momentum to get back through on the next attempt. The pattern fits the bill of an ABC correction, where the C wave is always lower than the initial correction A wave. B wave is in the opposite direction of the correction and may or may not have happened yet.

Will Bitcoin take another plunge through support eventually? What the cryptocurrency has on its side, is hope, and a rising trend line on the same Relative Strength Index. You can read the bullish take here.

Follow @TonySpilotro on Twitter or via the TonyTrades Telegram. Content is educational and should not be considered investment advice.

Featured image from iStockPhotos, 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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