Bitcoin About to Repeat 2020 Fractal!?!In mid August 2020 bitcoin was putting in something on its daily chart eerily similar to what is happening currently with the bitcoin price action. That 2020 chart is not shown here, but just to quickly recap for those who were not around then, bitcoin was coming out of a long bear market, putting in higher highs and higher lows, to the point of finding itself overextended inside of a rising parallel channel with triple bearish divergence on its RSI.
This of course would result in a violent yet swift correction to the downside that sent the price to levels most people at the time was not anticipating.
Fast forward to the present, and when we look at the chart, what is happening?
Bitcoin is coming out of a bear market, putting in higher highs and higher lows, finding itself now overextended inside of a rising parallel channel with triple bearish divergence on the RSI ladies and gentlemen.
Keep in mind that one does not need to view this as a fractal. Simple technical analysis tells one that when you have ascending price action accompanied by a bearishly diverging RSI, a correction most of the time ensues.
As of yet, we have not had the corrective follow thru in price action but as we enter into the new trading week, one has to believe it is now imminent.
So what levels should we be interested in as a buying opportunity if we breakdown?
I can start off by saying that a shallow move to the downside is extremely optimistic. And although price can reverse at any random point, it would not be wise to go long if we are to react at any shallow pullback in price. It is my humble opinion, that if we are to confirm a breakdown of the key 29500 level on the daily, the most optimum level for a long would be at the deepest level possible where one can strategize a proper stop loss. That would be the 88.6% fibonacci retracement from our recent high down to 24758, which puts the entry at about 25500.
This also is an area where a value area low is located which gives this spot great confluence.
Bitcoin in August of 2020 made this same deep retrace to a VAL area before finding a bottom. And not just a bottom but THE bottom. Bitcoin would never come back to those levels ever again and would run all the way to 69k.
That is why everything in this idea is so important.
What about levels before 25500? One has to believe that there is some sort of bounce area before the extreme value area low.
Well if we look at the present chart, we see a nice range between our 61% retracement (27500) and the point of control (POC) of the value range at about 26800. Any support level above those 2 will be extremely thin and will most likely result in nothing more than a dead count bounce. Short sellers will jump heavily at any bounce if and when we begin to breakdown which is why any bounce at a shallow retracement will be difficult to trust as a bottom/reversal spot.
Many people are beginning to flip their bias short, so naturally, one must gameplan if this does not playout.
A scenario in which this bearish idea may be invalidated, could come about if price action maintained itself above 30k while the RSI and any other bearish looking oscilators reset. If the RSI can find itself back into the neutral zone before a breakdown occurs, there would be hope that a severe correction in price may be avoided. One way or another, however, something now has to give and correct itself. The question, is will it be the indicators, or the price action on the chart just as it did nearly 3 years ago to date.
Either way, one last buying opportunity of a lifetime for the number 1 cryptocurrency asset could be just on the horizon.
