During the first week of 2020, the crypt space is already anticipating Bitcoin (BTC) being off to the races to achieve a new all-time high setting. On the other hand, the current downtrend made the crypto community think again.
The entire BTC bulls are rejoicing the downtrend, which was the first crypto has spent during the previous six months. That happened after the inverse head and shoulders bottom, which was formed at $6,500.
However, bulls were warned they before fully enjoying the victory, and they have to be beware that bears might be still in control. In the case that the history will repeat itself, BTC has a huge possibility of falling back into the downtrend. This downtrend will cause a further breaking down into the final low before it can turn around once more.
If you are aware, BTC is only 11 years young and comes with a little history. So, as the history repeats and markets are cyclical, rallies and corrections might take the same shape.
However, when it comes to Bitcoin, even a short period of drawdown can already leas to lost ground.
The recent downtrend made people in the crypto market reminisce about the bear market back from 2014 to 2015. Following the topping out of Bitcoin at over $1,000 in 2013, it dropped all the way back to below $150. before reaching the $150, it gained a short-period rally from $350 to $665 before picking up a severe downtrend.
Crypto analyst CryptoHamster tweeted, “I don’t insist. Moreover, I think it is very unlikely to happen. But don’t deny that there is a resemblance. Even the time scale is expanded, just as it is expected for the increased capitalization.”
By comparing the same sort of behavior and pattern against the current bear market of BTC along with the slightly adjusted timescale, the price action follows a similar trajectory following the peaked rally. Then, it began to head its way for the ultimate bottom wherein the cryptocurrency recoiled into the new bull market.
Other than the 2014 to 2015 bear market, Bitcoin also experienced a 2018 bear market.
Based on the previous cycle, BTC started forming the bottom pattern, which is a solid head and shoulders chart formation between June and July in 2018. Following the strong rally, BTC was stopped at $8,500. But it only led BTC to break out of downtrend resistance.
Today, BTC came with the recent downtrend once more, which caused its price to rally the same way it did in 2018.
In the case that same sort of price action will follow the last time, the price of BTC might fall back down to lows at $6,000 before it breaks down lower, leading to the 200-week moving average. Then, it will also resume the secular bull market that will possibly reach prices of $100,000 to $1 million per BTC.
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