Bitcoin’s price is now below $ 50,000 for the first time in a month, and despite the prices still high, the market is in a panic. There is now a widespread fear that the current market cycle has reached its peak and that things will soon enter a bear phase again.
At the same time, there is an imminent bubble about to burst, aggressive tax measures and forthcoming US government enforcement, and more that has recently pulled its feet from the bull run. Is this really the culmination of the cycle, or just time for a long-awaited reset?
Bitcoin price action is getting deadly fast, bears blind bulls
Rewind to just a week or so ago, and there was tremendous exuberance in the air. Coinbase Global had gone public, first listed on the Nasdaq, ushering in a “new paradigm” in crypto.
Related reading | Bitcoin Price Breakdown: Bulls In Trouble As $ 50,000 Is Lost
The asset class is certainly doing well, with support from brands like PayPal, Venmo and even Tesla. With companies buying up the little BTC on the exchanges – a number that is declining rapidly – and expectations in excess of $ 100,000 per coin, FOMO has been aggressive.
Buying dip with every drop has formed a parabolic pricing structure, which is unfortunately in danger of breaking down.
A rare signal calls the top as price action falls to parabolic curve | Source: BTCUSD on TradingView.com
Crypto Cycle Climax may be unexpected upon us
The chart above shows just how risky the situation is for the leading cryptocurrency based on market capitalization right now. Along with price action poised to break through the parabolic curve just as bad news comes in, a rare cycle top based on Pi has emerged for the fourth time in the asset’s young history.
Related reading | Bitcoin loses important lifeline causing bull’s blood to be pumped
The tool has cited several major crests, including two of the three that led to extensive bear markets in Bitcoin. When parabolic assets break down, data suggests they recover 80% of their gains. The last market cycle saw the cryptocurrency drop by 84% before rebounding after this signal appeared.
Another 84% drop here would bring Bitcoin back to around $ 10,000. A return of that magnitude would be shocking to anyone and certainly not what projections might suggest. A decline of that magnitude would also suggest a bear market, sooner than most expected.
Could our friend Elliott Wave "hi" and save the day? | Source: BTCUSD on TradingView.com
Another theory concerns Elliott Wave, saying that as long as the top cryptocurrency never falls below the January 2019 high, the base of the bull market is still strong and should continue once the dust settles.
Volatility is on its way, so don’t get caught up in the storm that may soon follow it.
Featured image from Pixabay, Chart from TradingView.com