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In June, Bitcoin (BTC) saw itself go through a spectacular blow-off top. In a few weeks, the cryptocurrency had shot up by 50%, leading to a number of predictions that this market would surpass its all-time high in months.

Related Reading: Why Bitcoin Needs to Flip $9,700 Into Support to Support Bull Case

True to the unpredictable nature of the crypto market, however, this didn’t happen. After tapping $14,000 — a quite important historical level, as this is a key Fibonacci Retracement level of the $20,000 bubble — BTC plunged as volumes spiked. Within a day, the asset had plunged some 20%. And it’s been a vast amount of pain since then.

The blow-off top that was seen in June, though, might be a sign that a long-term Bitcoin bull run is on the horizon. Here’s why.

Bitcoin Preparing for Bull Run

This June, the cryptocurrency market set a new volume record. Although some dispute this fact — the volume records were largely set on exchanges deemed “uncredible” by some — at least the futures side of Bitcoin (the CME and BitMEX) saw monumental trading days, as Bitcoin incurred its largest rally in over a year. Heck, BitMEX alone processed $16 billion worth of leveraged trades in one day alone.

When Bitcoin tumbled after this historical volume spike, analysts thought the nail was in the coffin of bulls. Though, digital asset manager Charles Edwards has proposed that the consolidation after the volume record is actually a positive signal.

In an extensive Twitter thread published on Monday, the analyst noted that in previous bull markets, fresh all-time highs in volumes were always followed by consolidation.

What’s interesting is what came after those consolidation phases. No, in the cases that Edwards pointed out, Bitcoin didn’t tumble. Instead, “huge rallies followed,” with the growth in volume leading to long-term exponential bull markets that brought Bitcoin to orders of magnitudes higher than it was before the surge.

This was the case in at least three scenarios Edwards singled out. So if historical precedent is of any current relevance, Bitcoin might be about to explode higher yet again.

It isn’t only volumes that are signaling that a long-term bull trend is (back) on the table. As reported by NewsBTC previously, popular cryptocurrency trader FilbFilb noted that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses. As Filb’s chart below depicts, the last time the 50-week crossed above the 100-week, Bitcoin rallied for months straight, surging to fresh highs month in, month out.

To add to that confluence, cryptocurrency markets research firm Delphi Digital found that Bitcoin’s volume profile has shown that a medium-term bottom is likely in. More specifically, the market printed signs of weak volume (capitulation), a short accumulation at the bottoming range, then a surge out of accumulation into a potentially new bull phase.

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Nick Chong , 2019-11-12 12:00:10

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.


While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

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Nick Chong , 2019-11-10 12:00:38

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