Bitcoin price was trading within a small symmetrical triangle. These continuation patterns suggest that another equally large downward move is imminent. However, a swing of lows would “perfect” a buying setup that could set off a pump-and-dump fractal from years ago.
Pump and dump would further confuse sentiment, taking advantage of the sudden shift towards low liquidity and thin order books. This is what the fractal looks like and what it says about the upcoming price campaign.
Market Timing: Why You Should Wait For The “Perfect” Buy Setup
Bitcoin price action is confusing right now. The cryptocurrency is consolidating but cannot break any deeper, nor have the bulls staged a recovery.
Related reading | Market timing: why Bitcoin could break lows before bouncing
However, the weekly downtrend has now reached a critical point. The weekly TD Sequential indicator is now at 9 counters. The market timing tool suggests 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 include that the last 8 or 9 candles sweep over the lows of the previous candles. This means that the weekly purchase setup is exactly under $ 30,000 and that support is required.
Bizarrely, the scenario is almost exactly like falling from over $ 10,000 to $ 7,800. The lows were then lowered to $ 7,200, which perfected the purchase setup and resulted in one of the largest intraday pumps in Bitcoin history.
Bitcoin Pump and Dump Fractal Examined: What To Expect
A closer look at the two structures shows how accurate this fractal might end up being. The main difference between the price action then and now was that there was even more upward pressure causing several more highs instead of the June 2019 blow off.
Still, the market structure is similar, as is support, resistance and price action. Since timing is also on the side of coincidences, along with a series of false breakouts upwards, another fakeout downwards would lure and trap shorts in the expectation that the symmetrical triangle goal will be achieved – and instead to $ 50,000 be pushed back.
The fractal suggests a massive pump and dump is coming | Source: BTCUSD on TradingView.com
At this point the fractal suggests that the goal will ultimately be achieved, albeit much later around Black Thursday. The target of the symmetrical triangle based on the measure is around $ 23,000 per BTC. The ease with which whales can move the price of Bitcoin back and forth is due to the sudden loss of liquidity and thinner order books than a few weeks ago.
Related reading | What the last leg in the crypto bull market could look like
As much as the fractal looks and the mood is just right, there is no telling what might happen, and the past is often not a good indicator of future performance. Is this time different?
Featured image from iStockPhotos, Charts from TradingView.com