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bitcoin thin ice false bottom
Nexo Logo

Building The Case For A Potential Bitcoin False Bottom

Tony Spilotro by Tony Spilotro
1 year ago
in BTC
Reading Time: 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.

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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.

Related Reading | Analyzing The Critical Bitcoin June 2021 Monthly Close

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.

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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.

bitcoin false bottom

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.

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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.”

Related Reading | Bull Signal From Bitcoin Bottom Is Best Hope Yet For Continuation

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
Tags: bitcoinbtcbtcusdBTCUSDTcryptoxbtxbtusd
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter at @tonyspilotroBTC and feel free to drop me a line if you would like to work together.

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