Why An Ongoing Bullish Bitcoin “Retest” Might Result In New Highs

Bitcoin price continues to be properly beneath its former document, however the prime cryptocurrency by market cap on the time of this writing is making one other try and reclaim misplaced help close to all-time highs set earlier within the yr.

The “retest” up to now is holding above a key degree, and when in comparison with previous peaks within the crypto market, this time virtually definitely seems to be completely different. If the repeating sample yields completely different outcomes but stays to be seen, however a novel consequence this time round would counsel a rally to new highs.

The Four Most Expensive Words: “This Time It’s Different”

According to Sir John Templeton, probably the most harmful mindset in investing is assuming that “this time it’s different.” Markets are cyclical and value motion typically displays fractal-like patterns. Even Bitcoin itself seems to repeat in cycles each 4 years primarily based on the built-in issuance mechanism known as the halving.

Related Reading | What Bear Market? Bulls Now “In Control” Over Every Bitcoin Timeframe

Despite this predictability, how the cycle unfolds can current itself in distinctive methods. For instance, the 2014-2015 bear market was a deep, rounding construction, resulting in a dramatic rise and prime in 2017. A failed retest led to further decrease highs and a descending triangle pattern that finally broke down.

A retest of former help turned resistance is up to now holding | Source: BTCUSD on TradingView.com

In 2019, Bitcoin rebounded from the latest bear market backside, beginning a brand new cycle in cryptocurrencies. After topping out beneath the asset’s former all-time excessive the identical yr, the remaining resistance above led to a different failed retest and sustained bearish part.

Bitcoin has topped as soon as once more, however this time the next retest seems to be holding which might result in new highs forward.

Lack Of Resistance Could Lead Bitcoin Back To Price Discovery

The lack of resistance throughout this part of the cycle might end in a special consequence from the previous two tops, regardless of Sir Templeton’s recommendation. Past retests additionally failed beneath the middle-line on the Bollinger Bands, which is a 20-week easy shifting common on the beneath weekly chart.

BTC makes it above the middle-BB on this retest, not on others | Source: BTCUSD on TradingView.com

The present retest has made it above the middle-Bollinger Band, which in an of itself can be utilized successfully as a sign to purchase or go lengthy.

Related Reading | Proof-of-Work: Bitcoin Back Programs That Put Your Money To Work For You

Note that over the past bull market, as soon as Bitcoin value was in a position to maintain and keep above the middle-SMA, the uptrend hardly ever took pause from that time on. It can be when the main cryptocurrency by market cap blasted off into the ultimate phases of the final bull market.

So, is that this time actually completely different? With no resistance above, reclaiming this degree with a profitable retest couldn’t presumably be extra bullish for Bitcoin.

After a failure to maneuver larger, typically markets retest a spread. If profitable, costs may move via the earlier vary. If unsuccessful, value finds a spread beneath as an alternative. With much less resistance than previous tops, the latest #Bitcoin retest is perhaps bullish. But BTC should maintain. pic.twitter.com/0uznyPk5kC

— Tony “The Bull” Spilotro (@tonyspilotroBTC) August 19, 2021

Follow @TonySpilotroBTC on Twitter or through the TonyTradesBTC Telegram. Content is academic and shouldn’t be thought-about funding recommendation.

Featured picture from iStockPhoto, Charts from TradingView.com