Bitcoin finally re-tested the resistance at $12,000 for the first time since 1st August a few hours back. The rally was short-lived with the king coin falling face forward to register a massive decline at support line $11,508. Credit to Bitcoin, the asset is above $11,900 again at the moment, but the largest virtual currency continues to swim in deep waters, suggesting a massive turnaround is coming, whether it is bullish or bearish.
Bitcoin hourly chart misses bearish break
Now, Bitcoin‘s sideways movement between the range $11,508 and $12,000 has been observed since 5th August but the fact that the recent bearish pattern register rise is concerning. As witnessed, a descending triangle for Bitcoin underwent a bullish breakout instead of a bearish pullback below support line $11,508, which indicated irregularity in the market. Now, with the price floating in the high range, a key pattern was observed between the price activity of August 2019 and August 2020.
Will Bitcoin repeat the bearish pullback of August 2019?
In the comparison chart above, a side-by-side analysis is drawn between Bitcoin’s price movement in August 2019 to BTC’s move in August 2020. Co-incidentally the price position of Bitcoin is at the exact same place right now, as it was back in 2019.
The rally before reaching $12,000 is very similar breaching past the same resistance in the charts. Now, something which is not uncommon in the market can pull back Bitcoin below $10,000 over the next week. If Bitcoin’s trend of 2020 completely mirrors the price movement of 2019, the coin will drop down to $9700 in the market.
The decreasing trading volume at the time of writing might be a red flag, indicating that the rally over the past one week is not strong, and based on weak trading fundamentals.
With high volatility exposure, a massive decline is certainly not out of question for Bitcoin as BTC’s price continues to struggle with the $12,000 range.