An eerie 2018 fractal could cause a recent price recovery on the Bitcoin (BTC).
Similarities in the Bitcoin price cycle
The fractal was first discovered by CryptoBullet (an independent market analyst), and shows Bitcoin creating an inverse head/shoulders pattern (IH&S), which preceded its December 2018 price decline to $3,100. The fractal is likely to increase the anticipation that Bitcoin’s price might experience similar drops in 2022.
This is due to the strikingly similar price trends in 2018 and 2021-2022. Bitcoin, for instance, reached two new highs of $10,000 in April and May 2018, before falling below $6,000 in July as it constructed the IH&S pattern.
BTC/USD daily chart with IH&S Fractal starting in 2018. Source: TradingView
In October 2021-2022, Bitcoin experienced a similar price trajectory. It reached two higher highs, near $65,000 in April, and $69,000 November. The price fell to $33,000 in February and formed another IH&S pattern.
BTC is now awaiting a breakout move towards, or above $50,000 due to IH&S. Lark Davis, a market analyst, projects Bitcoin to rise above $60,000.
#bitcoin is forming an inverse head-and-shoulders pattern with a target price of over 60k. Valid upon breaking the orange line, which is just above key area of resistance. pic.twitter.com/ijjZPzm6cB
Lark Davis (@TheCryptoLark), February 16, 2022
2018 BTC price fractal risk trapping bulls
Bitcoin’s bearish bias may still be reflected in a rise to $50,000 or $60,000, however. BTC’s chances of falling to $25,000 in 2022 if the 2018 fractal is repeated in 2022 seems higher, as shown in the chart.
BTC/USD weekly chart. Source: TradingView
The 2018 price action witnessed Bitcoin surge to the upside following its IH&S formation. It reached almost $10,000.
BTC’s price briefly reclaimed the 50-week exponential moving mean (the red wave; 50-week EMA) as support. However, it fell below it later. The price continued to decline towards the 200-week EMA, or the blue wave, near $3,000, and it reached its lowest point in December 2018.
If you apply the same fractals to the price action, Bitcoin could end up closing above the 50-week EMA and eventually reaching levels in the $50,000-$60,000 area. It will still move below the red wave and continue its decline towards the 200 week EMA which is close to $25,000.
This negative outlook is in line with what Ari Rudd (an independent market analyst) shared on Twitter on February 14.
Cointelegraph reported that the chartist mentioned Logarithmic Fractal Growth as well as moving average ribbon support, suggesting that BTC might drop to $24,000-27,000 in the future.
It’s not another 2018.
Bitcoin is moving forward against better fundamentals in 2019 than 2018. This is the bright side. BTC’s price rose from below $4,000 in March 2020, to $69,000 in November 2021. This is due to an increase in institutional and retail adoption, as well as macroeconomic risks like higher inflation.
January saw inflation of 7.5%. It is the highest in four decades. It is continuing to grow. Bitcoin is the best way to protect yourself from this silent, pernicious tax on your life’s work, your blood, sweat and tears.
Cameron Winklevoss, @cameron February 10, 2022
John Authers, Bloomberg Opinion’s November 2021 editorial writer, points out that headline inflation (the consumer price index or CPI) has increased by approximately 28% over the past ten year. However, 99.99% of the same gauge was deflation when it was denominated in Bitcoin. However, the math came with a warning.
“If you invested all of your savings in bitcoin a decade before, congratulations. Do you want to do that now? “Maybe not,” said Authers, adding that:
“Bitcoin has been delivering a lot deflation over the past 10 years. 76% in the past 12 months, but there have also been a few frightening episodes of annual inflation running at over 200%.”
The “terrifying episodes”, however, occurred during bearish cycles in 2015 and 2018.
com. You should do your research before making any investment or trading decision.
Eileen Wilson –Technology and Energy
My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.