Bitcoin Analysis: Is This Bullish Price Pattern Indicating Hope For Recovery?

Bitcoin is completing a bullish price pattern on its chart. This shows that a bullish recovery is close. Will there be a break upside in the coming days/weeks?

February 06, 2019 | AtoZ Markets - The cryptocurrency bearish trend lasted throughout 2018. However, at the end of that year, prices showed glimpses of buoyancy. This caused some sections of the Crypo world to start the talk of a real recovery. Meanwhile, Bitcoin and other cryptocurrencies have returned downside this year so far, though new lows have not yet emerged. In some other section of the crypto space, some believe the bearish trend is not yet over. Bitcoin, since it peaked close to $20,000 late 2017, has lost about 82% of its market value while the entire cryptocurrency market has also lost more than 80%.

In the last one week, BTC price chart has been printing a bullish reversal pattern which might fuel some bullish sentiments for the entire cryptocurrency market. Despite this pattern formation, price has stayed below 3500 for almost two weeks without any signs of breaking upside. Despite the seeming hesitance to remain downside, the bullish pattern is not yet invalid. Therefore, there are still chances that a break will happen upside, to 4500-5000 zone. In the last update, where the chart below was used, we discussed this reversal price pattern.

After the bullish recovery to 4200 from 3100 low, price seems to have completed a zigzag corrective pattern from late December 2018. At the end of the zigzag pattern is an ending diagonal. However, despite the completion of this pattern, price would need to break above the diagonal - a break above 3600 - to confirm its commitment to the upside. This has not happened yet.

Bitcoin Technical Analysis and Important Price Levels

The diagonal/wedge mouth stretches further and price might dip to 3250 before breaking upside. A dip below 3250 should get the bulls weary as price might dip below 3100 low and set a new low.

Will Bitcoin Drop For Seven Consecutive Months?

Despite the bullish signs on the chart, a break below 3100 will most likely set BTC for a 7th month of consecutive loses for the first time ever. That will lead to the longest running and deepest cryptocurrency bear market. Alex kruger, a cryptocurrency analyst, has described how Bitcoin has entered such a downward trend of sell-off in the ten years of its existence. He said:

Bitcoin has never before traded more than six months in the same direction. A down February would represent seven straight red months. Would be a first

Etoro market analyst, Mati Greenspan, reminded us that despite being the longest, this bear market is not the deepest. He said:

It should be noted though that even though this is the longest stretch, it's not the deepest... The Five-month bear of 2011 saw a drawdown of 93% and the crypto winter from the end of 2013 to the beginning of 2015 saw a total drawdown of 85%

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