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Bitcoin Bulls And Bears Alike Beware Of Potential Pump And Dump Fractal
Bitcoin price has been stuck trading within a small symmetrical triangle. These continuation patterns tend to suggest another equal sized move down is coming. However, a sweep of lows would “perfect” a buy setup that could initiate a pump and dump fractal from years ago.
The pump and dump would be designed to further confuse sentiment and take advantage of the sudden shift to low liquidity and thin order books. Here’s what the fractal looks like and what it says about the coming price action.
Market Timing: Why You Should Wait For The “Perfect” Buy Setup
Bitcoin price action is confusing at the moment. The cryptocurrency is consolidating, but unable to break any lower, nor have bulls been able to stage a rebound.
Related Reading | Market Timing: Why Bitcoin Could Sweep Lows Before A Bounce
The weekly downtrend has now reached a critical point, however. The weekly TD Sequential indicator is now at a 9 count. The market timing tool hints at a possible reversal, but a TD 9 is much more effective when “perfected.”
The TD 9 count remains to be perfected. Is a sweep of lows next? | Source: BTCUSD on TradingView.com
The parameters of a “perfect” buy setup involves the final 8 or 9 candle sweeping the lows of the previous candles. This means for the weekly buy setup to be just right, below $30,000 and support must be taken out.
The scenario bizarrely almost matches exactly the crash from above $10,000 to $7,800. Lows then were swept to $7,200, perfecting the buy setup and leading to one of the largest intraday pumps in the history of Bitcoin.
Bitcoin Pump And Dump Fractal Examined: What To Expect
Examining the two structures more closely shows just how accurate this fractal could end up being. The key differences between the price action then and now, was that there was even more upside pressure creating several more tops instead of the blow-off of June 2019.
Still, the market structure is similar, as is support, resistance, and price action. With the timing also on the side of coincidences, along with a set of false breakout to the upside, another fakeout to the downside would lure and trap shorts expecting the target of the symmetrical triangle to be reached – and instead find themselves squeeze back to $50,000.
The fractal suggests a massive pump and dump is coming | Source: BTCUSD on TradingView.com
At that point, the fractal suggests that target is ultimately reached, albeit much later on around Black Thursday. The target of the symmetrical triangle based on the measure rule is somewhere around $23,000 per BTC. The ease in which whales can move the price of Bitcoin back and forth is due to the sudden default in liquidity and thinner order books than they were just weeks ago.
Related Reading | What The Last Leg Up In The Crypto Bull Market Could Look Like
However, as similar as the fractal may look and sentiment just right, there’s no telling what might happen and the past isn’t often a good indicator of future performance. Is this time different?
Featured image from iStockPhotos, Charts from TradingView.com
Before And After: The Ethereum Fractal You Have Got To See
Ethereum price over the last couple of years has outperformed even Bitcoin’s, making it the most bullish cryptocurrency among the top three assets. But a fractal brewing in the altcoin could make for an incredibly bearish outcome if history repeats.
Here’s a closer look at the bearish cryptocurrency chart fractal potentially warning of a reversal, and the before and after you’ve got to see to believe.
Ethereum Fractal Says The Bull Market Is Finished For The Top Altcoin
Ethereum price has long been soaring right alongside Bitcoin, but since tapping above $2,000 per Ether token, the top ranked altcoins has been struggling with resistance since.
Related Reading | Ethereum Bullish Retest Offers “Once-In-A-Lifetime Opportunity”
Crypto analyst are torn whether the price action is bullish or bearish. One theory claims that the recent retest of the altcoin’s former all-time high presents a “once-in-a-life-time opportunity” for those who missed out on the initial rally.
Other analysts aren’t so sure. One crypto trader in particular has discovered a fractal in Ethereum price action, that closely resembles a more extended version of the 2017 bull market breakout.
The 2019 and 2020 price action is an extended fractal of the last bull run breakout | Source: ETHUSD on TradingView.com
The price action preceding the 2021 breakout closely resembles that of the price action during 2019 and 2020 that caused the cryptocurrency to soar to current prices. It’s what comes next, however, that must be seen to be believed.
Are Fractals Something To Fear, Or Do They Fail More Than They Follow Through?
All crypto bull rallies eventually come to an end, and bears regain control. The problem is, the fractal one crypto trader found, could indicate that is exactly what is about to happen with Ethereum price action.
After slamming into powerful resistance – then at around $1,400 per ETH – the altcoin corrected and fell into an extended, painful bear market. With the preceding price action matching the current patterns so well, albeit a much more extended version, could another bear phase soon follow?
What came next, however, was a multi-year bear market in cryptocurrencies | Source: ETHUSD on TradingView.com
Fractals, while frightening to see taking shape, often fail and have earned themselves more of a fable reputation among the crypto community than fact.
Things are very different this time around, most significantly, the amount of upside that happened in Ethereum before the peak was in.
Related Reading | Alt Season 2.0: Analyst Claims It’s “Showtime” For Ethereum
Back then, Bitcoin has also topped out, and few in the crypto space would worry that the currently ongoing bull market in the top cryptocurrency is anywhere near over.
Still, the similarities are there enough to take caution if you are holding the altcoin.
Featured image from Pixabay, Charts from TradingView.com
