Bitcoin - Will history repeat itself?
In this analysis, we are observing the potential repetition of market history by comparing the current Bitcoin price action to the previous bullrun cycle. By utilizing Fibonacci retracement levels, historical patterns, and the current macroeconomic landscape, we can formulate a hypothesis that the market might follow a similar trajectory if bearish sentiment prevails.
Historical Comparison
During the last bullrun, Bitcoin experienced significant price appreciation before eventually reaching a new all-time high (ATH). However, one key observation from the previous cycle is that before Bitcoin reached its ATH, the price retraced to the 0.618 Fibonacci retracement level multiple times. This level acted as a critical support zone, where the price found demand before making the next leg upward.
Currently, we are seeing a similar pattern unfolding. Bitcoin has recently experienced a parabolic rise, reminiscent of the previous bull cycle. As the market is showing early signs of exhaustion, the possibility of a deeper retracement towards the 0.618 Fibonacci level (around $50,000) is becoming increasingly plausible. If history repeats itself, this level could act as a springboard for the next significant price increase.
Last bullrun we had a 77% drop, and from the current ATH its only a 55% drop to the fib level:
Bearish Sentiment and Market Dynamics
Despite positive news emerging globally, such as the USA announcing its Bitcoin reserves and other adoption-related headlines, the market has reacted negatively, which is a characteristic of bearish sentiment. This kind of price action aligns with what we saw in previous cycles, where good news failed to provide upward momentum as the market was already in a distribution phase.
The fact that Bitcoin has failed to sustain gains even amid positive news further reinforces the likelihood of a deeper retracement. The market is driven by liquidity cycles, and the large players may still be in the process of shaking out retail investors before the next parabolic move.
Key Fibonacci Levels to Watch
Psychological and Macro Factors
Additionally, the broader macroeconomic environment plays a crucial role in this scenario. With ongoing geopolitical tensions, inflation concerns, and central banks' monetary policies, investors are more risk-averse, which could further contribute to the bearish price action.
Historically, Bitcoin has shown strong correlation to traditional markets, especially during uncertain times. If the macroeconomic environment remains unstable, Bitcoin could follow traditional markets into a corrective phase before making a recovery.
Daily Chart Imbalance Zones
On the daily chart, Bitcoin is currently trading between two key imbalance zones. These zones represent areas of liquidity where the market could either find support or break down further. The current price action suggests that if Bitcoin holds the imbalance zones as support, the market structure will still be intact, leaving the possibility for a continuation of the upward trend.
However, if these imbalance zones fail to hold, it would signal a bearish continuation pattern. In this case, the probability of Bitcoin testing the $50,000 level as the next major support becomes highly likely. Traders should closely monitor these zones, as they will play a pivotal role in determining the market’s next major move.
Conclusion
While no analysis can predict the future with certainty, the confluence of technical, historical, and macroeconomic factors suggests that Bitcoin might follow a similar pattern as the previous bullrun. A retracement to the 0.618 Fibonacci level around $50,000 is highly plausible before a new ATH is achieved. However, if bearish sentiment continues to dominate, we could see lower levels before the market finds its true bottom.
The current price action, coupled with negative market reactions to positive news, is an indication that larger players might still be accumulating before the next leg up. Traders and investors should remain cautious, monitor key Fibonacci levels, and be prepared for heightened volatility in the coming months.
Only time will tell if history will indeed repeat itself, but the current evidence suggests that the market might be following a familiar path once again.
Historical Comparison
During the last bullrun, Bitcoin experienced significant price appreciation before eventually reaching a new all-time high (ATH). However, one key observation from the previous cycle is that before Bitcoin reached its ATH, the price retraced to the 0.618 Fibonacci retracement level multiple times. This level acted as a critical support zone, where the price found demand before making the next leg upward.
Currently, we are seeing a similar pattern unfolding. Bitcoin has recently experienced a parabolic rise, reminiscent of the previous bull cycle. As the market is showing early signs of exhaustion, the possibility of a deeper retracement towards the 0.618 Fibonacci level (around $50,000) is becoming increasingly plausible. If history repeats itself, this level could act as a springboard for the next significant price increase.
Last bullrun we had a 77% drop, and from the current ATH its only a 55% drop to the fib level:
Bearish Sentiment and Market Dynamics
Despite positive news emerging globally, such as the USA announcing its Bitcoin reserves and other adoption-related headlines, the market has reacted negatively, which is a characteristic of bearish sentiment. This kind of price action aligns with what we saw in previous cycles, where good news failed to provide upward momentum as the market was already in a distribution phase.
The fact that Bitcoin has failed to sustain gains even amid positive news further reinforces the likelihood of a deeper retracement. The market is driven by liquidity cycles, and the large players may still be in the process of shaking out retail investors before the next parabolic move.
Key Fibonacci Levels to Watch
- 0.618 Level (~$51,500): Historically tested in the last cycle before the final leg up.
- 0.65 Level (~$48,500): Another confluence zone that could provide significant support.
- 0.786 Level (~$36,000 - $40,000): If the market becomes extremely bearish, this level could act as the final capitulation zone before the next macro bullrun.
Psychological and Macro Factors
Additionally, the broader macroeconomic environment plays a crucial role in this scenario. With ongoing geopolitical tensions, inflation concerns, and central banks' monetary policies, investors are more risk-averse, which could further contribute to the bearish price action.
Historically, Bitcoin has shown strong correlation to traditional markets, especially during uncertain times. If the macroeconomic environment remains unstable, Bitcoin could follow traditional markets into a corrective phase before making a recovery.
Daily Chart Imbalance Zones
On the daily chart, Bitcoin is currently trading between two key imbalance zones. These zones represent areas of liquidity where the market could either find support or break down further. The current price action suggests that if Bitcoin holds the imbalance zones as support, the market structure will still be intact, leaving the possibility for a continuation of the upward trend.
However, if these imbalance zones fail to hold, it would signal a bearish continuation pattern. In this case, the probability of Bitcoin testing the $50,000 level as the next major support becomes highly likely. Traders should closely monitor these zones, as they will play a pivotal role in determining the market’s next major move.
Conclusion
While no analysis can predict the future with certainty, the confluence of technical, historical, and macroeconomic factors suggests that Bitcoin might follow a similar pattern as the previous bullrun. A retracement to the 0.618 Fibonacci level around $50,000 is highly plausible before a new ATH is achieved. However, if bearish sentiment continues to dominate, we could see lower levels before the market finds its true bottom.
The current price action, coupled with negative market reactions to positive news, is an indication that larger players might still be accumulating before the next leg up. Traders and investors should remain cautious, monitor key Fibonacci levels, and be prepared for heightened volatility in the coming months.
Only time will tell if history will indeed repeat itself, but the current evidence suggests that the market might be following a familiar path once again.
Trade active
Bitcoin is currently testing the 80k price range. Let's see if it holds this level and creates a small bullish leg, or if we will break this level and look for support at the 75k range.Note
It looks like that for now we found support at the level of 78k
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Experienced trader with 6 years of expertise in all markets. 💼
Follow me for:
📊 Market updates
🔍 Indicators
📚 Educational content
Follow me for:
📊 Market updates
🔍 Indicators
📚 Educational content
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.