Bitcoin fractal setup from 2019 hints BTC price can rebound back to $50K

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Bitcoin (BTC) faces the prospects of reaching $47,500-$50,000 based mostly on its present pattern’s eerie similarity with the one in June via December 2019.

2019 Bitcoin fractal

Intimately, Bitcoin topped out around $14,000 on June 26, 2019, earlier than turning decrease for the rest of the 12 months on profit-taking sentiment, and in addition to FUD sparked by the Bitcoin Money hardfork, Fb’s stand-off with regulators over its crypto undertaking Libra, after which U.S. President Donald Trump and Treasury Secretary Steven Mnuchin’s threatening tone on Bitcoin.

The flagship cryptocurrency crashed to close $6,500 in December 2019. In doing so, it prompted its 50-day easy shifting common (SMA) to flip under its 200-day SMA, a phenomenon that technical chartists name a “death cross” and see its formation as an indication of prolonged sell-offs forward.

However, on the identical time, Bitcoin bulls held the worth above the 50-week SMA. The cryptocurrency’s one-day chart confirmed bears’ makes an attempt to crash the worth under its 50-week SMA. However bulls purchased these dips each time.

Willful purchase actions close to the 50-week SMA later led to a powerful upside rebound in the direction of the 61.8% Fib stage that constituted a dropdown Fibonacci retracement graph, drawn from across the $14,000-swing excessive to roughly the$6,500-swing low.

Bitcoin 2019 value motion. Supply: TradingView.com

The 2019 fractal additionally illustrated a minimum of two bullish divergence eventualities, whereby the Bitcoin value fashioned decrease lows whereas its day by day relative energy indicator, a price-momentum oscillator, made decrease highs. It hinted weak point within the prevailing bearish momentum. And because it turned out, the worth soared later.

2021

In 2021, Bitcoin reconstructed the 2019 situation midway. At first, the cryptocurrency’s correction from its file excessive of almost $65,000 landed BTC/USD proper on the identical 50-week SMA assist round $30,000. On the identical time, its transfer decrease enabled a loss of life cross setup.

Bitcoin’s value motion up to now week additionally hinted at a bullish divergence situation, as proven within the chart under.

Bitcoin’s April-June value motion. Supply: TradingView.com

TradingShot, a market analytics platform, noted {that a} bullish divergence formation, coupled with a rebound from the 50-week SMA assist, may once more ship Bitcoin costs to the 61.8% Fib stage of the present top-to-bottom Fibonacci retracement graph.

“The assist of the 1W MA50 is essential as it’s being achieved regardless of Bitcoin being on Decrease Lows (LL) whereas the 1D RSI is on Larger Lows (HL),” he defined.

“It is a Bullish Divergence and was additionally seen throughout October and late November-early Dec 2019. This divergence was sufficient to start out the rebound to the 0.618 Fibonacci retracement stage.”

Bitcoin 2019 and 2021 fractal. Supply: TradingShot.com

In a chart offered by TradingShot, the 61.8% Fib stage appeared close to $47,500. In the meantime, the opposite chart above confirmed the revenue goal close to $50,000.

Fundamentals

The statements appeared as Bitcoin closed its second quarter at a 41% loss, logging its worst declines because the 43% sell-off within the fourth quarter of 2018. The cryptocurrency’s current drop took cues from a flurry of adverse fundamentals, together with China’s crackdown on the crypto business, international regulators rising their scrutiny, and in addition to Elon Musk’s anti-Bitcoin tweets.

In the meantime, demand for Bitcoin additionally declined after the Federal Reserve’s hawkish tone. The U.S. central financial institution introduced that it would hike its benchmark rates of interest by the top of 2023 to curb inflationary pressures, coinciding with a BTC/USD fee plunge on June 16 and afterward.

Regardless of sturdy headwinds, Bitcoin managed to drift above $30,000, a psychological assist stage and is presently again above $35,000. Nonetheless, the equally sturdy resistance stage at $40,000 is maintaining the cryptocurrency’s short-term bearish bias intact.

“One expects that the longer we go with out a $40,000-handle, finally assist goes to crumble and provides approach to a pointy transfer in the direction of $20,000,” Fawad Razaqzada, an analyst at ThinkMarkets, told the Wall Street Journal, noting that it leaves Bitcoin at crossroads within the third quarter.

TradingShot added:

“Have all of the adverse fundamentals priced in already? We won’t know for positive but when they’ve, the Bullish Divergence on the 1D RSI undoubtedly reveals one thing.”

The views and opinions expressed listed here are solely these of the writer and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer entails danger, you need to conduct your personal analysis when making a choice.