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Home Cryptocurrency news Bitcoin

Bitcoin Fractal Hints At Six More Months of Downtrend, Worst To Yet Come

Tony Spilotro by Tony Spilotro
1 year ago
in Bitcoin, Cryptocurrency news
Reading Time: 3min read
bitcoin fractal crypto
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Crypto market sentiment is the most bullish its been this year thus far, and the most bullish for Bitcoin since the historic October 2019 rally that set the record for the asset’s third-largest single-day gain.

However, while bulls are celebrating early that the downtrend is over, a fractal from 2018 could suggest that there’s going to be another six months of crypto winter and that the worst of the current downtrend is yet to come.

Frightening Bitcoin Fractal Is Crypto Investors’ Worst Fears

Starting in December, Bitcoin price repeatedly tested lows around $6,500, forming an inverse head and shoulders pattern that has since confirmed and driven Bitcoin to as high as $8,450 last night before a slight retracement began.

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Related Reading | Bitcoin Price RSI Breakout Could Target $9K Short-Term

The first-ever cryptocurrency continues to trade above $8,000, currently around $8,300. The leading crypto asset by market cap holding above $8,000 is considered extremely bullish, and it’s convinced the crypto community that the current downtrend has finally come to an end.

The Relative Strength Index is showing a clear breakout of a downtrend, however, at the same time the indicator is signaling that Bitcoin is far more overbought now than it was during the October, China news-driven pump.

bitcoin fractal

However, the current price action appears to be eerily familiar and nearly matches up perfectly with a fractal dating back to July 2018. And if the fractal is legitimate and plays out, not only is Bitcoin’s current downtrend not over as many believe, but the worst is still yet to come.

bitcoin fractal

Back in July 2018, Bitcoin touched a low of $5,800 forming the head on a massive, inverse head and shoulders pattern. Once the pattern confirmed, the crypto asset rocketed to $8,450 where the rally came to a halt – the same price level where last night’s rally stopped.

The resulting peak made a lower high in price, but a higher high on the RSI, forming a bearish divergence. The same exact divergence has also appeared on the RSI on current daily timeframes as well, suggesting that the rally could be over, and another drop is ahead.

bitcoin fractal

The fractal would also hint at six more months of downtrend, and a retest of 2018 bear market lows near $4,200, where the breakout initially occurred back in April 2019.

Related Reading | Bitcoin Rally More Overbought Than October Pump Above $10K, Data Shows 

While there’s no denying the price action and indicator signals are eerily similar, there are a number of unique factors that could suggest that this time is different. A brewing war between the US and Iran could cause investors to flight to Bitcoin as a safe haven asset, and with two full years of downtrend now behind us, selling is likely far more exhausted than it was back in July 2018, just six short months after the crypto bubble popped.

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Tags: bitcoincryptofractal
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. 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 and feel free to drop me a line if you would like to work together.

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