Potential reversal of the island leaves Bitcoin Bulls stranded

Months ago, when the Bitcoin price hit $ 13,000, top analysts said that “the train has left the station,” and they were right. Or maybe a missile ship would have been a better analogy. The cryptocurrency took off and has yet to refuel so far.

As momentum is waning, bears have experienced an ‘island reversal’ that could drive higher prices up for some time. Here’s what to expect from the tropical-sounding pattern that could leave bulls stranded for a while.

Technical analysis: what is an island reversal?

According to Investopedia, an “island reversal” is a price pattern on a daily candlestick chart with a hole on each side of the structure. “This price pattern suggests that prices can reverse any trend they are currently showing, from up to down or down to up,” reads a description.

Bitcoin’s recent price action fits the pattern and conditions that validate its existence to a “T”. An island reversal forms after a long trend leading into the pattern. Bitcoin’s performance has been incredible since March last year.

Related reading | The Bearish Bitcoin Chart Bulls absolutely don’t want to see

At the peak of the trend, there is an initial price differential, followed by a consolidating price cluster. Finally, there is a gap back on the daily chart, establishing the ‘island of prices isolated from the previous trend’.

The theory behind the pattern suggests that the gaps left behind will not be filled for some time.

The price action matches the "island reversal" pattern | Source: BTCUSD on TradingView.com

Will bulls stay stranded on Bitcoin Bear Island?

The reversal of the island was initially noticed by one of crypto Twitter’s top technical analysts on the CME BTC Futures chart. And while islands are typically associated with sun and sand, the island left here in Bitcoin may have been deserted for some time – but for how long?

A zoomed out look at the map can give an idea of ​​what’s to come.

Bitcoin could lose the RSI, but find support at the trend line on Stochastic | Source: BTCUSD on TradingView.com

Bitcoin’s island reversal comes at a time when indicators are finally going down, the short-term parabolic curve has been breached and a bearish wedge has formed on higher timeframes.

The basics are optimistic and BTC is leaving the stock exchanges every week. Perhaps a sale can deter stronger hands from selling their coins.

Related reading | Two Patterns, One Coin: Is Bitcoin Bearish Or Bullish Right Now?

But all is not lost to Bitcoin. The stock-to-flow model and the world’s top analysts predict much higher prices of hundreds of thousands per coin.

There is also potentially another parabolic curve that is not yet fully developed that will keep the predominant bull trend going even if things get volatile in the coming weeks.

Featured image from Pixabay, Charts from TradingView.com

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