History may not repeat, but it does rhyme. Using a form of fractal analysis we can see BTC setting up now to play out like the 2017 bull run where a volatile rally is followed by a volatile retrace followed by a period of stasis at a slightly higher low.
In this case, there were many alleged catalysts in the news that could be pointed to; however, the signs were already in the chart by 5/7ish with the double top & a pattern of lower highs.
Currently the technicals support a dead-cat bounce, which is also suggested in the fractal. It is important to remember the pattern may not play out exactly; look for rhyming & follow the signals in StochRSI & MACD.
A sudden influx of dip buying along with some regulatory clarity could lead to a resumption of the rally, but without some new catalyst, I feel we will see BTC behave similarly to 2017 until sometime in 2024 when the next halvening event serves as a catalyst for the next bull run.
Blockchain technology is likely still in the "Early Adopters" phase of the Diffusion of Innovation Model, so the timeline also feels right for mainstream adoption by the Early & Late Majority to propel BTC to new highs at the next halvening.
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The StochRSI & MACD still suggest a possible rally. Daily is also gradually making higher lows even if the price is experiencing resistance around 40k-ish.
A break above that would see resistance at 42418.16.
OBV strongly suggests that this is a failed rally with more downside possible. Level to watch is 34688.43
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Downtrend continues. Level to watch remains 34688.43
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With 34688.43 breached on 5/29 we're now watching 31737.08. Will the price bounce off of 31737.08 or break below? Based on the current technicals it is likely we will trend down to 31737.08 and may break slightly below; though the possibility of a dead cat bounce off or near that level remains intact.
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We're at a critical inflection point where we will either resume uptrend or confirm the dead cat bounce with a move lower to eventually test 31737.08.
The current technicals suggest we may rally as high as 42490.45 at which point it would be overbought on the daily & could begin to retrace. However, the weak energy of the current rally suggests that it could also stall around 36678 and resume the downtrend.
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A bullish cross has formed on the MACD while the RSI has entered slightly overbought territory.
It feels like there may be a brief rally that may test as high as 42656.19 before resuming the current downtrend.
Resistance Levels to watch: 38678.64 39341.32 40833.01 42656.19
Support Levels: 35694.95 34534.75 31717.11
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June 3 was our brief rally, rejected at 39341.32 resistance. Support has been violated at: 35694.95 34534.75
Now watching 31717.11
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Has been trading a range testing 31717.11 & 42588.70; now testing the low again with possibility of more downside. Looking for a close below 31717.11 which could lead to a rapid test of 28364.11.
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We had the rapid test of 28364.11 followed by an expected bounce & some sideways consolidation. MACD & RSI indicate a potential multi-day rally that could test as high as 41533.04. A break above that could signify that we found a bottom & are renewing an uptrend.
From the fractal perspective, this is the first major violation which could also suggest a renewed uptrend; however, this could also be a deviation that reverts. Price action rhymes but doesn't necessarily repeat.
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Based on the OBV & StochRSI this rally looks like Bull Trap with more downside on the way.
As it's been trading a range of 31717.11 to 42588.70 we should look for another violation of 31717.11.
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Current technicals suggest more downside on the daily & monthly, while the weekly suggests the possibility of a movement up. It feels like we're range-bound since there was a double bottom near 31k.
I'm neutral waiting clearer directional signals. I believe more downside is possible, but we're also seeing some activity that could turn that double bottom into the beginning of a reversal: - Buying from whales - Less BTC in exchange wallets - BTC as a national currency in El Salvador
On the other hand, there are still solid headwinds: - Institutional purchases have slowed down or reversed - Regulatory actions abroad, especially in China - Rumblings & warnings from the FED.
On the neutral signals, the recent S2F model divergence is really interesting; either it will mean revert & this is the beginning of what could be a volatile rally to new ATHs or it will prove that BTC has not achieved a Digital Gold use case which could still lead to an alt-coin rally as new contenders seek to compete for BTCs market cap.
It will also help us understand what correlation there is between BTC & Market Risk.
For example is BTC the ultimate risk-on speculative asset & it's price drop is due to gains being taken & put into more traditional investments with lower perceived risk? Or is it because BTC is digital gold; therefore risk-off, leading to it being sold off when investors are risk-on.
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Technical strength & risk-on equities environment suggest more upside possible.
It's possible we will see an upward trend to test either the resistance at $42518.85 or the downtrend line representing the descending wedge.
However, it's also possible we will see a stall in momentum & remain range-bound for awhile.
Should we get close to the descending wedge, watch carefully for a breakout as that could begin a new bull rally. In which case, we may see the BTC Stock2Flow deviation revert to mean causing a rapid rise in BTC prices.
Regarding: "For example is BTC the ultimate risk-on speculative asset & it's price drop is due to gains being taken & put into more traditional investments with lower perceived risk? Or is it because BTC is digital gold; therefore risk-off, leading to it being sold off when investors are risk-on. "
I believe we're seeing confirmation that BTC is a risk-on speculative asset rather than digital gold.
Gold & Silver have been in down-trend for several days & SPY just had a pullback that has helped reset fear levels a little bit before resuming it's current bullish trend.
Ultimately, only time will tell.
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I was a year early, but we got there.
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I was early, but the fractal did play out hitting the middle of the potential bottom ranges just like the fractal.
Please update on current scenario.
Some saying mini alt season coming can you share approx. targets or time
jsgiardino
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@ATH_Buyer, I just updated it. Time & targets can be inferred from the chart.
RE: Altcoins, I don't really analyze them currently; they're very diverse. It's like analyzing market sectors. BTC's use-case is digital gold & I have experience trading precious metals.
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@jsgiardino, Hi... Did you marked! I asked some saying mini alt season coming and exactly that happened after then I did not sold alts and stuck very deep. Now another point is may be 12.6k to be touched for sure.
jsgiardino
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@ATH_Buyer - Sounds like you got stuck on some alt-coins? I'm sorry to hear it, so many people got wiped out on the alt-coin mania. Most coins are strongly correlated with either BTC or ETH and in a crash all assets tend to get strongly correlated to the downside.
ATH_Buyer
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@jsgiardino, yes almost everything all I have invested is now -90% and I am too much worried about it.
jsgiardino
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@ATH_Buyer, yikes! I'm very sorry to hear that. That's a very large draw-down that is hard to recover from, especially quickly. Your best course of action would be to consult a financial advisor.
sopla
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damn market - paint by numbered your prediction so far lol. Nice anaylsis.
jsgiardino
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@sopla, thank you! This recent sideways action action has violated the fractal a little bit, so I'm definitely curious to see how it plays out in the coming days.
DrStein
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Interesting...there should be a "special" term for this a multi-headed monstrous head and shoulders pattern. I wonder if there are other crypto or stocks that have formed this in the past. Thank you.
jsgiardino
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@DrStein, My forecast was based on Bitcoin's 2017 action; both BTC & ETH had a similar pattern back then. BTC has followed it more closely than ETH has this time around, but it's starting to deviate so interesting days are ahead.
Some saying mini alt season coming can you share approx. targets or time