Take a look at the two images below. On the right is an excerpt from the “Encyclopedia of Chart Patterns” by Thomas Bulkowski, which shows something called a “bump-and-run reversal bottom,” or BARR bottom for short. On the left is ()’s one-week chart stretching from last August to now. Notice anything?
Well, if you couldn’t tell, the pattern depicted on the right, which shows a series of higher lows, a massive sell-off on the back of monumental selling pressure, a zone of accumulation, an eventual bullish breakout past a declining trend line, and a subsequent rally is looking much like right now. In fact, save for a few discrepancies in the accumulation zone and the time span, the charts are effectively identical.
The two charts are so similar that the analyst who discovered this correlation wrote: “this means that bears are f**ked.” Biddles, as the trader is known, is referring to the fact that if the textbook-esque BARR bottom plays out for , could return to $5,000 next week before entering an “uphill run” — a move that would catapult crypto assets back into a bull rally.
In subsequent tweets, Biddles continued to cite charts from Bulkowski’s technical analysis bible to explain that by many measures, might be on the verge of a rally. He explained that ’s one-day chart is currently exemplifying signs that is trapped in an ascending triangle, which is a bullish pattern marked by higher highs, an overarching resistance, and slow price action. With volume declining, an act that is bullish per Bulkowski, Biddles confirmed that if closes above $5,320, could be in for a rally to a higher region.
Some Aren’t All Too Convinced
While the textbook charts show that is ready for a bullish breakout, potentially to new year-to-date highs, some are sure that a pullback is to be seen. As by World News previously, trader “Magic Poop Cannon” recently told investors that may be on the verge of collapse. Through a View post, the trader opined that ’s rally from $3,400 in January to $5,450 just last week “painted half of an enormous evening star doji pattern,” adding that the movement has been in “textbook formation” thus far.
For those who missed the memo, an evening star is a reversal pattern, in which there is a large uptrend (seen last week), stagnation (this week), and reversal. A doji candle is one in which its opening and closing price are effectively the same, signaling indecision in a market. If this “evening star Doji” pattern plays out as Magic expects, could see a 15% to 20% drop to $4,100 in the coming ten days, and then sell-off even further, potentially to the mid $3,000s, to finish this formation.
Technicals aside, one analyst is convinced that due to historical precedent, will drop. In a three-part thread posted recently, an analyst going by Jonathan that from his perspective, could crash to $2,000 in the near future, due to the fact that the majority think the bottom is in. He adds that investors’ incessant, even religious devotion to being bullish on is bearish, as against the crowd often proves to be successful in markets.
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Published at Wed, 17 Apr 2019 01:03:26 +0000
