The recent recovery in Bitcoin price has bulls breathing a sigh of relief, hoping that the worst part of the coronavirus market panic is now behind us. But an ominous fractal has appeared on Bitcoin price charts, potentially warning of a repeat of the record-breaking drop last month.
Bitcoin Price Fractal Points to Repeat of Epic “Black Thursday” Plunge
The economy started off 2020 stronger than ever. Major stock indexes reached all-time highs, and Bitcoin price had reclaimed $10,000 and all signs pointed to a new bull run as the asset’s halving approached.
But a black swan event arrived with the coronavirus pandemic, causing a massive shock to the economy and highlighting just how broken the current monetary system is, and how vulnerable humanity is to something like a virus.
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Production has been crippled due to the lockdown, and nearly every industry has been hurt by the outbreak. Jobless claims have skyrocketed into the tens of millions. The resulting panic fearing a recession, caused nearly every asset to experience a massive selloff, including Bitcoin.
Stocks, gold, oil, and others also tanked, but cryptocurrencies fell by between 50-70% in most cases, due to how volatile the speculative assets are. Bitcoin price fell to below $4,000.
And while the first-ever cryptocurrency has made as strong recovery, nearly doubling in value from the extreme low, an ominous chart pattern and fractal has appeared on Bitcoin price charts, hinting at a repeat of the catastrophic collapse.
Will Panic Strike Twice in the Cryptocurrency Market? Ominous Chart Pattern Says Yes
Panic hit the cryptocurrency market in a big way, with a historic selloff that beat even the impact the pandemic had on the stock market, which saw the worst decline since 1987 – long before crypto ever existed.
Before the drop, Bitcoin price formed a pattern that appeared similar to a head and shoulders, with an extra right shoulder at the end. The same pattern has since appeared on charts once again, and it could be foreboding another dangerous drop.
In the chart below, the previous price pattern has been overlayed on top of the current price action, showing just how similar the movements have been.
After breaking through resistance, a spike forms a left shoulder, then Bitcoin falls back down to support – only to pop back up and form the head. A right shoulder is later formed, but as traders prepare for the drop ahead, another shakeout pump wipes out shorts, ahead of the real drop downward.
The same pattern has just formed, and the second, right shoulder shakeout just happened ahead of yesterday’s daily close. But does Bitcoin price break down again, or does the asset push higher this time around, now that traders have been shaken out of their positions?
Featured image from Pixabay