Current Bitcoin Consolidation Zone Could Act As The Next Bear Market Bottom
With only a 30% pullback on the books, it is hard to consider the most recent consolidation phase in Bitcoin much of a correction. But whatever base is currently being built within this range, could act as the next has a lot more to go. But all uptrends eventually come to an end, assets correct, and a Running Bitcoin: Passing The Torch From Hal Finney To Jack Dorsey
Finding a bottom isn’t easy, but because Bitcoin is cyclical with some degree there’s a chance things can be predicted. Using a key zone from the last bull market that ultimately acted as the 2018 Fibonacci retracement and extension tools, measuring the 2013 peak to the 2014 bottom, Bitcoin eventually hit a snag in the 2017 uptrend around the 2.618 level.
Fibonacci extensions act as potential points of support and resistance when none otherwise exist. With the former all-time high cleared, Bitcoin is back in price discovery mode, and the only potential threats come from Fib extensions, negative news, or rounded numbers like $20,000.
Could this be the next bear market bottom in 2023? | Source: BTCUSD on TradingView.com
Fib extensions, like rounded numbers, act as more of a phycological resistance level. The human brain seeks the easiest path, and investors commonly enter orders at whole, rounded numbers. In terms of why Fib levels work, things aren’t as clear, but because Fib extensions represent a percentage of the original peaks and troughs previously set, investors might have certain targets set based on measured moves.
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Bitcoin is now trading near the same critical 2.618 Fib level. Finding when the cryptocurrency bottoms is also tricky, but because of Bitcoin’s halving-based cyclical nature, there’s a chance that the on the verge of such broad adoption that the next top is so high, $50,000 will be too far in the rear view to act as the next bottom.
Featured image from Deposit Photos, Charts from TradingView.com
Published at Tue, 09 Feb 2021 20:00:32 +0000