Bitcoin price is still well below its former record, but the top cryptocurrency by market cap at the time of this writing is making another attempt to reclaim lost support near all-time highs set earlier in the year.
The “retest” thus far is holding above a key level, and when compared to past peaks in the crypto market, this time almost certainly appears to be different. If the repeating pattern yields different results yet remains to be seen, but a unique outcome this time around would suggest a rally to new highs.
The Four Most Expensive Words: “This Time It’s Different”
According to Sir John Templeton, the most dangerous mindset in investing is assuming that “this time it’s different.” Markets are cyclical and price action often exhibits fractal-like patterns. Even Bitcoin itself appears to repeat in cycles every four years based on the built-in issuance mechanism called the halving.
Related Reading | What Bear Market? Bulls Now “In Control” Over Every Bitcoin Timeframe
Despite this predictability, how the cycle unfolds can present itself in unique ways. For example, the 2014-2015 bear market was a deep, rounding structure, leading to a dramatic rise and top in 2017. A failed retest led to additional lower highs and a descending triangle pattern that ultimately broke down.
A retest of former support turned resistance is thus far holding | Source: BTCUSD on TradingView.com
In 2019, Bitcoin rebounded from the most recent bear market bottom, starting a new cycle in cryptocurrencies. After topping out below the asset’s former all-time high the same year, the remaining resistance above led to another failed retest and sustained bearish phase.
Bitcoin has topped once again, but this time the subsequent retest appears to be holding which could lead to new highs ahead.
Lack Of Resistance Could Lead Bitcoin Back To Price Discovery
The lack of resistance during this phase of the cycle could result in a different outcome from the past two tops, despite Sir Templeton’s advice. Past retests also failed below the middle-line on the Bollinger Bands, which is a 20-week simple moving average on the below weekly chart.
BTC makes it above the middle-BB on this retest, not on others | Source: BTCUSD on TradingView.com
The current retest has made it above the middle-Bollinger Band, which in an of itself can be used effectively as a signal to buy or go long.
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Note that during the last bull market, once Bitcoin price was able to hold and stay above the middle-SMA, the uptrend rarely took pause from that point on. It is also when the leading cryptocurrency by market cap blasted off into the final stages of the last bull market.
So, is this time really different? With no resistance above, reclaiming this level with a successful retest couldn’t possibly be more bullish for Bitcoin.
After a failure to move higher, often markets retest a range. If successful, prices might pass through the previous range. If unsuccessful, price finds a range below instead. With less resistance than past tops, the most recent #Bitcoin retest might be bullish. But BTC must hold. pic.twitter.com/0uznyPk5kC
— Tony “The Bull” Spilotro (@tonyspilotroBTC) August 19, 2021
Follow @TonySpilotroBTC on Twitter or via the TonyTradesBTC Telegram. Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com
Bitcoin worth continues to be effectively beneath its former file, however the prime cryptocurrency by market cap on the time of this writing is making one other try and reclaim misplaced help close to all-time highs set earlier within the yr.
The “retest” so far is holding above a key degree, and when in comparison with previous peaks within the crypto market, this time nearly definitely seems to be totally different. If the repeating sample yields totally different outcomes but stays to be seen, however a singular end result this time round would counsel a rally to new highs.
The 4 Most Costly Phrases: “This Time It’s Completely different”
In line with Sir John Templeton, essentially the most harmful mindset in investing is assuming that “this time it’s totally different.” Markets are cyclical and worth motion typically reveals fractal-like patterns. Even Bitcoin itself seems to repeat in cycles each 4 years based mostly on the built-in issuance mechanism referred to as the halving.
Associated Studying | What Bear Market? Bulls Now “In Management” Over Each Bitcoin Timeframe
Regardless of this predictability, how the cycle unfolds can current itself in distinctive methods. For instance, the 2014-2015 bear market was a deep, rounding construction, resulting in a dramatic rise and prime in 2017. A failed retest led to extra decrease highs and a descending triangle sample that in the end broke down.
A retest of former help turned resistance is so far holding | Supply: BTCUSD on TradingView.com
In 2019, Bitcoin rebounded from the newest bear market backside, beginning a brand new cycle in cryptocurrencies. After topping out beneath the asset’s former all-time excessive the identical yr, the remaining resistance above led to a different failed retest and sustained bearish section.
Bitcoin has topped as soon as once more, however this time the following retest seems to be holding which may result in new highs forward.
Lack Of Resistance May Lead Bitcoin Again To Value Discovery
The shortage of resistance throughout this section of the cycle may lead to a distinct end result from the previous two tops, regardless of Sir Templeton’s recommendation. Previous retests additionally failed beneath the middle-line on the Bollinger Bands, which is a 20-week easy transferring common on the beneath weekly chart.
BTC makes it above the middle-BB on this retest, not on others | Supply: BTCUSD on TradingView.com
The present retest has made it above the middle-Bollinger Band, which in an of itself can be utilized successfully as a sign to purchase or go lengthy.
Associated Studying | Proof-of-Work: Bitcoin Again Applications That Put Your Cash To Work For You
Be aware that over the last bull market, as soon as Bitcoin worth was in a position to maintain and keep above the middle-SMA, the uptrend hardly ever took pause from that time on. Additionally it is when the main cryptocurrency by market cap blasted off into the ultimate phases of the final bull market.
So, is that this time actually totally different? With no resistance above, reclaiming this degree with a profitable retest couldn’t presumably be extra bullish for Bitcoin.
After a failure to maneuver greater, typically markets retest a spread. If profitable, costs may cross by the earlier vary. If unsuccessful, worth finds a spread beneath as a substitute. With much less resistance than previous tops, the newest #Bitcoin retest is likely to be bullish. However BTC should maintain. pic.twitter.com/0uznyPk5kC
— Tony “The Bull” Spilotro (@tonyspilotroBTC) August 19, 2021
Observe @TonySpilotroBTC on Twitter or by way of the TonyTradesBTC Telegram. Content material is academic and shouldn’t be thought of funding recommendation.
Featured picture from iStockPhoto, Charts from TradingView.com
