Since the $8,600 lows seen at the start of the week, Bitcoin has mounted a strong comeback, recovering to ~$9,800.
A growing number of analysts, however, have said that the recovery is just noise in an otherwise bearish trend. They cite fractals and textbook patterns suggesting that it is only a matter of time before BTC falls back towards the $8,000s, then maybe even lower.
Bitcoin Looks Almost Exactly Like Gold — and That’s Bearish
A fractal is a technical term used by investors to describe a phase of price action that repeats at different times and/or for different assets. As Investopedia explains:
“Fractals also refer to a recurring pattern that occurs amid larger more chaotic price movements”
Bitcoin’s price action from the March lows until today, according to a top trader, is almost identical to that of gold from the March lows. Both assets have extremely similar trajectories and a consolidation pattern at their respective local highs that are structurally similar.
According to charts shared by the trader, who said that Bitcoin’s price action is a “carbon copy” of gold, BTC could soon fall towards the $8,000s to match gold’s price action.
Bearish Bitcoin and gold price chart shared by cryptocurrency trader “TraderXO” (@Traderx0x0 on Twitter).
Related Reading: Crypto Tidbits: $200M of Bitcoin Liquidated, Ethereum DeFi Adoption Limited, Bloomberg Is Bullish
Not the Only Sign of Impending Downside
The expectations that Bitcoin will fall towards the $8,000s have been echoed by another trader, who said that BTC’s recent price action looks much like a schematic outlined by technical analyst Richard Wyckoff.
The trader said in reference to Bitcoin’s bearish rejection at $10,500 earlier this week and how it looks like a Wyckoff pattern:
“Volume-wise I can’t look past distribution up here given the reaction to the high sweep. There are very few re-accumulation ranges that we would expect to see that contain a move above the range which was so strongly rejected. Typically in a re-accumulation structure this move would hold, not come back inside. That’s usually one of our first signs of distribution.”
Bitcoin Still Long-Term Bullish
Despite the expectations of downside, the fundamentals and on-chain metrics show that the Bitcoin ball is still squarely in the court of bulls.
Per previous reports from NewsBTC, Hans Hague, a senior quantitative analyst at crypto-asset fund Ikigai Asset Management, noted that on-chain metrics show the asset is in “heavy accumulation.”
Hague added that with the block reward halving, which decreases the supply of BTC coming on the market, the market may soon see “fireworks.”
Also bullish is Blockstream CEO Adam Back, who said that the “money printing” going on in the world in response to the recession, he sees BTC hitting $300,000 in the next five years.
Related Reading: There Are Three Fundamental “Waves” That Could End Ethereum Bears in the Long Run
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Price tags: xbtusd, btcusd
Bitcoin’s Chart Looks Like a “Carbon Copy” of Gold, and That’s Bad for the Bull Case
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