Over the past week, Bitcoin (BTC) has finally managed to mount a comeback, rallying from the local low of $9,300 to $10,500 as of the time of writing this.
However, one analyst recently pointed out that this price action only confirms the idea that the cryptocurrency market may soon undergo another retracement — one that could bring the Bitcoin price down to the $7,000s for the first time in literal months.
Il Capo of Crypto, a trader, recently posted the tweet below, which shows gold’s price action (2-day chart) in 2012 to 2013 and Bitcoin’s price action (12-hour chart) from June to now.
As seen below, there are clear similarities between the two charts: a series of lower highs and higher lows, the assets retracing after their RSI reached “overbought” levels, and clear interactions with key Fibonacci Retracement levels.
In other words, the Bitcoin price is seemingly doing exactly what gold did back in 2012 to 2013, which was its peak in the wake of the Great Recession.
Capo writes that should the entire fractal play out, meaning BTC will soon lose support at ~$9,500, a drop to $7,200 to $7,500 — a key Fibonacci Retracement support — should play out. That would represent a 30% drop from the current level of $10,500.
So if this finally plays out, the bottom should be 61.8% of the entire move ($7200-7500), then some kind of consolidation, and $16-24k in June 2020 (Bitcoin halving) pic.twitter.com/ybfyH55jO0
Capo isn’t the only analyst currently expecting Bitcoin to potentially drawback further. According to Jack, the lead analyst at a trading and analysis group known as Bravado, the most likely scenario for BTC is for it to “bleed our way to $7,400 in a falling wedge” to bottom in early-November. He points out that BTC is clearly in a declining wedge with a downward-sloping wave backdrop, implying that further correction is entirely possible.
I think this is the most likely scenario for $BTC
Bleed our way to 7.4K in a falling wedge bottom in early November
From there we push in to breakout and throttle full force, making our way back above $10K late November or in December and set course for near ATH towards halving pic.twitter.com/j5lXXkuqYT
But while the fractal and technicals are pointing towards downward price action, fundamentals suggest that demand for Bitcoin should only be growing, potentially putting off any notable retracement.
As reported by NewsBTC previously, Adam Back, the creator of the Proof of Work protocol that Bitcoin mining is based on, recently laid out a number of reasons why BTC is ready to appreciate greatly in the coming years. They are as follows:
While some of these factors have yet to impact the cryptocurrency markets; the others have.
Featured Image from Shutterstock
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