The crypto market, and more specifically Bitcoin, is at an important inflection point in its existence. Having become a household nearly overnight thanks to the late-2017 media blitz that fueled the cryptocurrency’s meteoric ascent to its all-time high price of $20,000, and the resulting bubble pop that led to the longest bear market on record, Bitcoin needs to once again prove itself in the eyes of investors that its here to stay.
As Bitcoin nears closer to the powerful support turned resistance at $6,000, a clean break of the former springboard and close above resistance could show investors and traders that it’s off to the races for a new bull market. Two separate charts from other financial markets appear to look eerily similar to the path Bitcoin took throughout the bear market until this important turning point, and could hint at what might happen next in Bitcoin price charts.
Turkish New Lira Chart Provides The Bullish Take on Bitcoin Price
In a recent tweet by prominent crypto trader CryptoWolf, the analyst shared a chart with shockingly similar peaks and troughs matching Bitcoin’s 2018-2019 bear markets, and could serve as a bullish prediction for Bitcoin’s path from here.
At that time this was pure hopium. pic.twitter.com/ywU2ggBIn5
— Wolf (@IamCryptoWolf) May 3, 2019
The forex market chart shows the price action of the USD/TRY trading pair. As can be clearly seen, the chart showing the United States dollar paired against the Turkish New Lira very closely resembles each swing high and low of the Bitcoin bear market.
There’s even a V-shaped low following a blow-off top, that developed into what eventually became a failed Adam and Eve bottom. Later, an inverse head-and-shoulders much like the late June, early July bottom in Bitcoin, played out, but failed to reinvigorate bulls enough to end the bearish decline.
After that, support broke, painting a new low that quickly rebounded, revisiting previous highs within a matter of a couple months once candles closed back above the support turned resistance.
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Bitcoin is currently at that same support turned resistance that once broken, resulting in a trip back to the peak of the blow-off top. Should the same occur in Bitcoin, the price of the crypto asset could hit $20,000 by July if the chart plays out the same. But similar to the analyst saying that “at the time this was pure hopium,” any bulls thinking $20K is around the corner is relying solely on that “hopium.”
Silver Shows the Bearish Version for BTC
Of course, there are similarities to be found in many charts, as markets tend to cycle similarly. In the price chart for silver, which “posted 1000%+ parabolic gains,” then crashed, shows a similar trajectory as Bitcoin.
#Bitcoin vs $Silver$Silver posted 1000%+ parabolic gains/crashed$BTC too posted parabolic gains/drop$Silver found support at 200 Month MA$BTC found support at 200 Week MA$Silver found resistance at 50 Month MA$BTC struggling against 50 Week MA
(Comparison for Fun only) pic.twitter.com/aV5Xo9wlAn
— Trading Room (@tradingroomapp) April 30, 2019
Following the break of the parabolic advance, which chartists like Peter Brandt claim can cause the price of an asset to decline over 80% on average, silver found support at the 200-month moving average. Bitcoin on the other hand, found support on the 200-week moving average.
Silver then rallied from the support, eventually running head first into the 50-month moving average. Bitcoin is currently flirting with the 50-week moving average.
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Silver was unable to break through resistance caused by the 50-month MA, causing the asset to fall once again, this time breaking the 200-month moving average that had previously played support.
If Bitcoin were to fall from here, the 200-week moving average currently rests at roughly $3,450 and a break below it would likely lead to panic and new lows for the leading cryptocurrency by market cap.
As noted, Bitcoin is at an important point in its lifecycle and what happens next could impact its longevity as a financial technology.
Featured image from Shutterstock
