Bit­coin ex­hib­ited re­cur­ring pat­terns over 2019, sim­i­lar to the ones seen in na­ture

AMBCrypto Weekly - - News -

The leaves that bud out of the stem, the pat­tern on the shell of snails, the petals of flow­ers; all of these have a com­mon de­nom­i­na­tor, a pat­tern. Na­ture fol­lows a par­tic­u­lar kind of sym­me­try. The world that we live in has many mys­ter­ies to it, many that might seem chaotic to naked eyes. How­ever, there seems to be a pat­tern emerg­ing out of this seem­ingly chaotic world and the only way to look at this pat­tern would be to zoom out and look at the big­ger pic­ture.

Mys­ti­fied by it, the Greeks and the Ro­mans used the pat­tern in all of their struc­tures. The rep­e­ti­tion of these pat­terns is called frac­tals. Ev­ery de­ci­sion we take might seem ar­bi­trary, but we are col­lec­tively in­flu­enced by a higher power; not that of a higher be­ing, but of na­ture.

Source: BTC/USD on Trad­ingView

Per­haps, the most ap­par­ent ex­am­ple is the stock mar­ket. Al­though peo­ple in stock mar­kets are out to make prof­its, a pat­tern can be seen in the price charts; an in­escapable pat­tern, be it Bit­coin, S&P500, Dot­Com bub­ble, gold rush, etc.

A pat­tern in a pat­tern

De­spite our con­scious ef­forts to stray away from the path, on a larger time scale, hu­man be­hav­ior seems to con­verge, form­ing a re­peat­ing pat­tern. Over the course of 2019, Bit­coin has re­peated it­self, form­ing a frac­tal. To peo­ple who caught it, they had an op­por­tu­nity to seize a good profit.

Sim­i­lar pat­terns can still be iden­ti­fied in Bit­coin over dif­fer­ent timescales. For this pur­pose, 2019 is split into 4 phases,

Pe­riod of ex­ces­sive stag­na­tion - Jan­uary 01, 2019, to April 01, 2019 Pe­riod of ex­ces­sive growth - April 01, 2019, to June 26, 2019 Pe­riod of cor­rec­tion - June 26, 2019, to Septem­ber 24, 2019 Pe­riod of ex­tended cor­rec­tion - Septe­me­ber 24, 2019 to date Pe­riod of ex­ces­sive stag­na­tion

The pe­riod saw Bit­coin mov­ing side­ways. The price had just spi­raled from $6,000 to $3,000, BTC was try­ing to re­cover from this mas­sive col­lapse and hence, the side­ways/stag­na­tion. More­over, this pe­riod is ob­served to have huge pumps and dumps in suc­ces­sion, es­pe­cially on the 4-hour chart. These pumps and dumps can also be cat­e­go­rized as BART pat­terns.

To most, this pe­riod was the ac­cu­mu­la­tion phase as the price had col­lapsed from a whop­ping $20,000 in De­cem­ber 2017 to a shock­ing $3,000. There was wide­spread miner ca­pit­u­la­tion, ram­pant FUD and fear in the com­mu­nity. Most alt­coins and projects got oblit­er­ated to dust in this pe­riod.

In hind­sight, the rise in April 2019 wasn’t a mys­te­ri­ous con­cept. How­ever, the surge in April came as a shock to most peo­ple in the com­mu­nity. No one could ex­plain the sud­den rise.

While some at­trib­uted it to Asian mar­kets, oth­ers stated that it was a fool’s rally and a bull squeeze. To ev­ery­body’s sur­prise, the rally did not stop as it kept grow­ing in size, ex­po­nen­tially, with each pass­ing month. There was a par­a­digm shift dur­ing this phase as the bear­ish mo­men­tum flipped and be­came bullish.

The growth hit a ceil­ing on June 26, 2019, when Bit­coin reached a stag­ger­ing $13,800. A 242% rise in un­der 86 days. Bit­coin showed ev­ery­body why it was a whole new game. More­over, this pe­riod showed ex­ces­sive growth when com­pared to the pre­vi­ous phase as the surges were much higher, eas­ily more than 7% [high­est pump/dump in the pre­vi­ous phase].

The ex­ces­sive growth phase had no pat­terns form­ing as this was an un­nat­u­ral rise in Bit­coin’s price. It was also a mini bull-run en­cap­su­lated within an ex­tended bear cy­cle.

This pe­riod’s cor­rec­tion lasted for 3 months and it ended with a mas­sive drop in Bit­coin’s price. Bit­coin cor­rected by 42% in this phase as the price fell from $13,800 to $8,000. Just like the rally that pre­ceded it, this dump was also un­con­trol­lable. An in­ter­est­ing ob­ser­va­tion here is the frac­tal within Bit­coin’s bear cy­cle, as men­tioned above.

Un­like the pe­riod of ex­ces­sive growth, it was pos­si­ble to do a tech­ni­cal anal­y­sis of Bit­coin. There were var­i­ous pat­terns be­ing formed in this phase, fall­ing wedges, Bart pat­terns, ris­ing wedges, etc.

As the name sug­gests, this pe­riod was Bit­coin’s jour­ney to find the sec­ond bot­tom, a foothold, so to speak, for it to rally higher. Al­though the halv­ing is a few months away, the price seems to be drop­ping, which is a com­plete nega­tion of the nar­ra­tive sur­round­ing halv­ing.

Speak­ing to AMBCrypto, Dig­i­ta­lik.net, a Bit­coin an­a­lyst, stated,

“His­tory has shown to us two times al­ready that halv­ing is very im­por­tant event so I don’t be­lieve this time would be any dif­fer­ent. If min­ers are to con­tinue min­ing 50% less with same amount of hard­ware, elec­tric­ity and man­power then this has to af­fect the price. The ques­tion is how big the mag­ni­tude will be but no­body can say this.”

This phase con­sisted of mul­ti­ple Bart pat­terns oc­cur­ring in suc­ces­sion, ris­ing and fall­ing wedges, etc. At press time, the price of Bit­coin hov­ered be­low the $7,500 level, with Bit­coin dom­i­nance at 68.6%.

Ac­cord­ing to “Chart­sBTC,” based on Bit­coin halv­ing cy­cles, the price of Bit­coin is sup­posed to hit any­where be­tween $29K to $47K in 2020. With re­spect to the fast-ap­proach­ing halv­ing, Dig­i­ta­lik.net added,

“I be­lieve halv­ing will have im­pact. The only ques­tion is - how big.”

On the adop­tion front, Bit­coin still has a long way to go. Al­though built as a de­cen­tral­ized peer-to-peer cur­rency, Bit­coin is still far away from achiev­ing this goal. Even with sec­ond-layer so­lu­tions, Bit­coin is still nowhere close to speeds [trans­ac­tion fi­nal­ity and set­tle­ment] that the tra­di­tional fi­nan­cial in­fra­struc­ture pro­vides. As an ex­am­ple, Bit­coin’s tps is ex­po­nen­tially lower than what XRP and its blockchain can pro­vide.

As for what the price of Bit­coin is go­ing to be in 2020, no­body knows. As the price of BTC hov­ers in the $7,500 re­gion, it could ex­plode any minute and start its bull run, or it could sink lower, per­haps, hit­ting the same bot­tom as in De­cem­ber 2018.

How­ever, some peo­ple in the Bit­coin ecosys­tem are still bent on see­ing BTC rally be­fore the halv­ing event, which is sched­uled for May 2020.

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