After this week’s flash crash in Bitcoin and altcoins, sentiment is back to being bearish just like that. Bears are taking an “I told ya so” tone throughout social media, pointing to early 2018’s “dead cat bounce” as proof of the bear market to return.
But according to a pitchfork channel tool drawn across important pivot points in Bitcoin price action, this flash crash could have been the last dip ever before the last leg up, the top is in, and the real bear market is here.
The Great El Salvador Bitcoin Bloodbath
The nation of El Salvador this week rolled out its legislation permitting Bitcoin as authorized tender. Pictures of signs at major brands like Starbucks and McDonald’s adorned with Bitcoin logos have made rounds across social media. Cryptocurrency adoption is occurring in contrast to ever earlier than.
During a day that was supposed to celebrate the game-changing crypto asset that gave birth to an entire industry of digital assets, it was instead a day of destruction.
Bitcoin value fell by 20% on some platforms, or as a lot as $10,000 in a single day from native highs round $52,000. The cryptocurrency has fallen hard, but is holding at a key mid-point of a massive pitchfork channel.
Pitchfork Tool Could Pin-Point Last Dip Before Bull Peak
Pitchforks are often related to farming or offended mobs, however sure technical evaluation instruments additionally take such a reputation. Drawing the tool involves staking the pitch at a certain point, and stretching it across price action to fit certain trend pivots.
The device is used subjectively, however when correctly drawn can present the framework for predicting future value actions. What’s interesting about the pitchfork channel, is that each major line drawn is a Fibonacci level.
In the chart above, Bitcoin value is holding above the all-important 0.5 Fib – which occurred to be the launchpad to the final bull market’s peak. During this cycle, the top of this pitchfork channel was never touched, but the bottom was on Black Thursday.
Further validating the road the cryptocurrency is holding at, it additionally stopped the 2019 rally in its tracks. It acted as support in January and February 2021, then resistance in May and June.
Losing the road in 2018 prompted the plummet to the bear market backside, and earlier than that was the final leg up over the past bull run. With Bitcoin price holding the key mid-point once again, the next direction should be a touch of the top of the channel.
