According To Pattern, Bitcoin Might Have Bottomed
Take a look at the two images below. On the right is an excerpt from the “Encyclopedia of Chart Patterns” by Thomas Bulkowski, which shows something called a “bump-and-run reversal bottom,” or BARR bottom for short. On the left is Bitcoin (BTC)’s one-week chart stretching from last August to now. Notice anything?
Well, if you couldn’t tell, the pattern depicted on the right, which shows a series of higher lows, a massive sell-off on the back of monumental selling pressure, a zone of accumulation, an eventual bullish breakout past a declining trend line, and a subsequent rally is looking much like Bitcoin right now. In fact, save for a few discrepancies in the accumulation zone and the time span, the charts are effectively identical.
The two charts are so similar that the analyst who discovered this correlation wrote: “this means that bears are f**ked.” Biddles, as the trader is known, is referring to the fact that if the textbook-esque BARR bottom plays out for Bitcoin, BTC could return to $5,000 next week before entering an “uphill run” — a move that would catapult crypto assets back into a bull rally.
In subsequent tweets, Biddles continued to cite charts from Bulkowski’s technical analysis bible to explain that by many measures, BTC might be on the verge of a rally. He explained that Bitcoin’s one-day chart is currently exemplifying signs that BTC is trapped in an ascending triangle, which is a bullish pattern marked by higher highs, an overarching resistance, and slow price action. With volume declining, an act that is bullish per Bulkowski, Biddles confirmed that if Bitcoin closes above $5,320, BTC could be in for a rally to a higher region.
Some Aren’t All Too Convinced
Photo by Aleksi Räisä on Unsplash