The bulls are back, pushing the Bitcoin price higher after the cryptocurrency found support at the $16,529 price level. However, the most important question Bitcoin traders are asking is:
Is this Bitcoin breakout real or is it just a bull trap before the larger Bitcoin melt down begins?
In this Bitcoin analysis, we will be taking a critical look at the charts and trying to answer that question to the best of our ability. But before we go down to the lower timeframes and begin analyzing the patterns currently developing on the Bitcoin chart, we must take a step back and see what the bigger picture is saying.
The Higher Timeframe Tells A Story Of Doom
While Bitcoin is still in an uptrend on the higher timeframes, there is an important pattern that has been repeated over and over again since Bitcoin was created.
This pattern is of high quality and is currently flashing red flags and warning us of a potential dump in the Bitcoin price in the coming weeks.
In 2017, we had our first bull run in Bitcoin. And immediately after that bull run, we had a massive retracement in the Bitcoin price. We saw another bull run in 2019 and after that, we saw the same retracement pattern repeat with price retracing more than 70% to 80%.
Now we are in the 2020 bull run and the big question is, will this retracement pattern repeat itself in the coming weeks?
Important Levels To Watch For
Going lower to the 1-hour chart, we see Bitcoin is currently bullish with price surging higher after bouncing off critical support. However, for this bullish move to continue, Bitcoin needs to break an important resistance.
The $18,800 price level has served has important minor support and resistance in the past.
If Bitcoin breaks this resistance, then there is a high probability that this current retracement is over and we might likely continue to trend higher in the coming days.
However, if the resistance holds strong, there is a very high probability we might see more weakness come into the Bitcoin market and push the price as low as the $15,700 support level.
To gain more information on how to partake in this coming Bitcoin Bull run and trade this cryptocurrency, you can read my How To Trade Bitcoin Guide. You can also check my top list of Best Bitcoin Exchanges To Trade With.