Bitcoin Fractal Suggests Upside Potential
Price action that is seen in Bitcoin (BTC) markets seems entirely random, controlled by a select group of “whales” and “institutions” that can seemingly flash crash any digital asset with a few clicks. Yet, some don’t think that this in the case. In fact, through the use of fractal analysis, some have been able to predict future price action.
In a recent post published to TradingView, analyst Filb Filb explained that Bitcoin’s recent attempts to break past $9,000 is a “carbon copy” of when BTC tried to break $6,000. More specifically, BTC bounced between the 61.8% and 78.6% Fibonacci retracement levels, then breaking past the 78.6% to rush to the 4.272. Filb explains that if he extrapolates this price action out to the current set up, Bitcoin could see $18,700 in the coming weeks, and potentially move even higher from there if the conditions are impeccable.
Filb did this somewhat as a joke, explaining that his followers shouldn’t “trade off this chart for obvious reasons”, but there is another fractal that corroborates the theory that Bitcoin could soon see $20,000, no joke.
Earlier this week, we reported that one analyst, going by the moniker “Crypto Kaleo”, revealed that BTC was currently trading as a fractal (a previous bout of price action/pattern overlayed/fit onto the current chart) suggested almost exactly. In fact, Bitcoin traced early-May’s movements to a tee, experiencing similar drops and rebounds at points predicted by the fractal. This fractal is so accurate that is seemingly predicted the recent move from $8,000 to $8,900, which was a move that caught many regular traders off guard.
If the entire fractal comes to fruition, meaning that all of early-May’s movements play out yet again, yet this time on a bigger time horizon, we should be taken “straight to $20,000”, as concisely put by Kaleo. Indeed, the fractal above, which has held in a clear parabolic pattern, shows that Bitcoin could hit $20,000 by July, and then be susceptible to a relatively large 20%+ drawdown. This may absurd, especially considering that BTC breaching $20,000 in the coming sixty days would negate any traditional models to price the asset, the fractal has been almost entirely accurate so far.
There have been some skeptics of fractal analysis though. Alex Krüger says that “looking at correlations by overlaying prices (which is what fractal analysts do) is a great way to find spurious relationships… and is a very common mistake among chartists and finance people.” Others simply look to the fact that Bitcoin rallying to $20,000 from here would effectively break any historical trend of BTC following clear cycles, but this is ironic in the end.
Title Image Courtesy of Andre Francois Mckenzie Via Unsplash