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The Bitcoin price often creates patterns that are very similar to price movements in the past. These recurring patterns are called fractals. The current inverted price movement since reaching a high on June 26, 2019, looks very similar to that of December 2018 — when the price reached the bottom of $3280.

There are several similarities between the 2018 Bitcoin bottom and the current correction. However, the area in which they differ the most is the previous movement since there are more support areas in the current correction. If the price were to break down from the final support area at $7000, it is likely to undergo a sharp movement similar to 2018. At the current time, we cannot confidently state that it will do so. (We have previously discussed this possibility here.)

Cryptocurrency trader and analyst @fxshawn pointed out these two similarities — outlining the phases in which he believes the price was at during each time.

While not explicitly stated, the moving averages (MA) are the 100- and 200-day ones.

However, the second picture is inverted, meaning that if BTC acts in the same manner, it will break down — rather than break out. Let’s take a closer look and see how likely that is to occur.

Bitcoin’s 2018 Bottom

During the 2018 bottom, the Bitcoin price initially did not follow a trading pattern. After roughly two months, it began to create an ascending triangle.

Around 50 days after breaking out from the triangle, the 100- and 200-day MAs made a bullish cross.

Interestingly, the Bitcoin price did not retrace after breaking out — rather, it continued its upward movement.

Bitcoin Triangle

Bitcoin Triangle

The bottom was combined with strong bullish divergence in the daily RSI. This was succeeded by a cross of the MACD into positive territory. The MACD did not cross into negative territory again until the current correction.

Bitcoin RSI MACD

Bitcoin RSI MACD

Current Correction

In the current movement (inverted), the Bitcoin price has similarly created an ascending triangle and has broken out.

A bullish cross between the 100- and 200-day MAs, however, has yet to occur. Based on the slope of the MAs, if the Bitcoin price continues to decrease, a bearish cross will transpire in November.

Bitcoin MAs

Bitcoin MAs

Unlike the previous movement, the bottom was not combined with a bullish divergence in the RSI.

However, the MACD crossed into negative territory later and has not crossed back since.

Bitcoin Inverted Triangle

Bitcoin Inverted Triangle

While these movements share similarities, there is one part in which they significantly differ from each other — this is the strong support area all the way to $7000.

On the contrary, in the previous bottom, the previous decrease was very sharp — so there was no resistance for the Bitcoin price to breakthrough.

Bitcoin Resistance

Bitcoin Resistance

We are not yet confident enough to predict that the Bitcoin price will break down below $7000. If it does, however, it is possible that it will go to the low $5000s — therefore validating the fractal.

Do you think the Bitcoin price will break down below $7000? Let us know in the comments below.

Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.

Images courtesy of Twitter, TradingView.

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