During the first week of2020, the crypt space is already anticipating Bitcoin (BTC) being off to theraces to achieve a new all-time high setting. On the other hand, the currentdowntrend made the crypto community think again.
The entire BTC bulls arerejoicing the downtrend, which was the first crypto has spent during theprevious 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 isonly 11 years young and comes with a little history. So, as the history repeatsand markets are cyclical, rallies and corrections might take the same shape.
However, when it comesto Bitcoin, even a short period of drawdown can already leas to lost ground.
The recent downtrendmade people in the crypto market reminisce about the bear market back from 2014to 2015. Following the topping out of Bitcoin at over $1,000 in 2013, itdropped all the way back to below $150. before reaching the $150, it gained ashort-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 samesort of behavior and pattern against the current bear market of BTC along withthe slightly adjusted timescale, the price action follows a similar trajectoryfollowing the peaked rally. Then, it began to head its way for the ultimatebottom wherein the cryptocurrency recoiled into the new bull market.
Other than the 2014 to2015 bear market, Bitcoin also experienced a 2018 bear market.
Based on the previouscycle, BTC started forming the bottom pattern, which is a solid head andshoulders chart formation between June and July in 2018. Following the strongrally, BTC was stopped at $8,500. But it only led BTC to break out of downtrendresistance.
Today, BTC came with therecent downtrend once more, which caused its price to rally the same way it didin 2018.
In the case that samesort of price action will follow the last time, the price of BTC might fallback down to lows at $6,000 before it breaks down lower, leading to the 200-weekmoving average. Then, it will also resume the secular bull market that willpossibly reach prices of $100,000 to $1 million per BTC.
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