Months ago when Bitcoin price made it through $13,000 top analysts said “the train has left the station,” and they were right. Or maybe a rocketship would have been a better analogy. The cryptocurrency took off and has yet to refuel, tot nu.
With momentum waning, bears have staged an “island reversal” that could push off higher prices again for some time. Here’s what to expect from the tropical-sounding pattern that could leave bulls stranded for some time.
Technische analyse onderwijs: What Is An Island Reversal?
According to Investopedia, an “island reversal” is a price pattern on a daily candlestick chart that has a gap on each side of a the structure. “This price pattern suggests that prices may reverse whatever trend they are currently exhibiting, whether from upward to downward or from downward to upward,” a description reads.
The recent Bitcoin price action fits the pattern and the conditions that validate its existence to a “T.” An island reversal forms after a long trend leading into the pattern. Bitcoin’s performance has been incredible since March of last year.
Gerelateerd lezen | De Bearish Bitcoin Chart Bulls willen absoluut niet zien
At the climax of the trend, there’s an initial price gap, followed by a consolidating price cluster. Tenslotte, there’s a gap back down on the daily chart, establishing the “island of prices isolated from the preceding trend.”
The theory behind the pattern suggests that the gaps left behind will go unfilled for some time.
The price action matches the "island reversal" pattern | Bron: BTCUSD op TradingView.com
Will Bulls Be Left Stranded On Bitcoin Beer
Bear market wordt gedefinieerd als een dalende reeks prijzen voor verschillende soorten activa. Een bearish investeerder wil profiteren van de beweging van dalende prijzen. Je kunt aan een beer denken, zwaait zijn grote poot naar beneden op de investering, verpletterende prijzen.
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The island reversal was initially spotted by one of crypto Twitter’s top technical analysts on the CME BTC Futures chart. And although islands are typically associated with sun and sand, the island left behind here in Bitcoin could be deserted for some time – but how long?
A zoomed out look at the chart could provide some ideas of what’s to come.
Bitcoin could lose the RSI, but find support at the trend line on Stochastic | Bron: BTCUSD op TradingView.com
Bitcoin’s island reversal comes at a time when indicators are finally turning down, the short-term parabolic curve has been violated, and a bearish wedge has formed on higher timeframes.
Fundamentals are bullish and more BTC is leaving exchanges each week. Perhaps a selloff could scare stronger hands into selling their coins.
Gerelateerd lezen | Twee patronen, Een munt: Is Bitcoin momenteel bearish of bullish?
But all is not lost for Bitcoin. The stock-to-flow model and the world’s best analysts are projecting much higher prices of hundreds of thousands per Munt
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There’s also potentially another parabolic curve in process not fully developed yet that keeps the predominant bull trend in tact, even if things get volatile over the next several weeks ahead.
Uitgelichte afbeelding van Pixabay, Grafieken van TradingView.com
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