But Is It Really Time For Crypto To Take A Chill Pill?
Interestingly, however, some are sure that Bitcoin isn’t going to pause from here. In fact, some are sure that the rally will continue, no holds barred. As spotted by trader B. Biddles, Bitcoin’s one-week chart looks effectively identical to the bump-and-run reversal bottom chart depicted in the “Encyclopedia of Chart Patterns” by Thomas Bulkowski.
The two charts are so similar that the analyst who discovered this correlation wrote: “this means that bears are f**ked.” Biddles is referring to the fact that if the textbook-esque BARR bottom plays out for Bitcoin, BTC will soon enter an “uphill run” — a move that would catapult crypto assets back into a bull rally.
Bitcoin May Pull Back Before Rally
Over the past few days, the crypto market has entered an eerily calm state, with Bitcoin (BTC) barely budging on a day-to-day basis. However, a leading analyst claims that this may end soon, recently predicting that volatility will soon pick up once again, whether we like it or not.
Galaxy, as the analyst is known, recently remarked on Twitter Bitcoin’s current price action and volume profile all point towards the fact that BTC will mirror the price action it did in late-December to early-April, in what is known as a “fractal.” If Bitcoin replicates how it acted in the aforementioned time frame, BTC will fall by $500 to ~$4800 in the next 72 hours, slowly decline to the $4,600 to $4,800 range to hit the lower bound of an ascending channel, then embark on an eventual rally to $6,800. Seemingly referencing his comments about altseason, he adds that this move will result in a “typical correction” for altcoins, followed by a stronger recovery.
Galaxy isn’t the first analyst to have proposed the idea that cryptocurrencies will see a pullback before an eventual move to new year-to-date highs.
Tom Lee, the head of research at Fundstrat, recently suggested that BTC may see a short-term pullback, but the bottom is in and Bitcoin is in a “bull run”. Per previous reports from this outlet, Lee drew attention to his firm’s Bitcoin Misery Index, which aims to capture the average sentiment of a cryptocurrency holder, to back this remark. The Bitcoin permabull explained that as the Misery Index hit a reading of 89 on April 2nd, when BTC rallied past $5,000 straight out of left field.
As Lee explains, since 2011, a Misery reading of over 67 came only during bull markets. However, when Misery peaked above 67, BTC, on average, fell by 25%, as investors looked to take profits. A 25% drop from here would mean BTC falling to $4,050, which was where the asset was trading at prior to the ongoing rally.
Chonis, too, recently hinted that a pullback might be inbound before a true rally. Per Chonis, Bitcoin took five attempts to break out of its accumulation zone, exiting its bottom range on its sixth rally. With Bitcoin’s recent foray past $5,000 only being its really second or third rally in the bottoming range ($3,000 to $6,000), Chonis suggested that we may be “early in the bottoming,” meaning that a few more months of fake outs could ensue.