Bitcoin

Bitcoin Price Patterns Are Not Really Patterns Until They Are Validated

The price of the Bitcoin is not following a 2018 kind of “descending triangle” in the doom.  The descending triangle is indicative of a bearish chart pattern, and it is mainly used in technical analysis.  This is typically created when the price is forming a descending trend line that has lower highs and the second horizontal line trend that will have two equal lows that evolve slowly.

While several analysts agree that this is an extremely bearish situation, statistics are not in agreement with this. Descending triangles tend to break up nearly 53% of the time.

When the triangle occurs in the uptrend, it will break up nearly 63% of the time.  Even during times when the price is forming a descending triangle on the current Bitcoin price chart, the odds that it will break are only 37%.  This does sound bearish.

However, the correct pattern is a descending channel with a bull flag that has three touches on the descending resistance and two touches on the descending support line.  The current argument is that a pattern is not a pattern until it has been validated.

The price of the Bitcoin failed to go high during August during the times of trade turmoil.  Concerns about a trade war increased, and despite, the price did not improve.  There were some gains for the Bitcoin during early August, and the price was rising by more than 20% between August 1, 2019, and August 6, 2019.

President Trump tweeted about cryptocurrency, and he spoke about how he had plans to impose tariffs on China.  The Chinese Yuan touched upon a more than 10-year low versus the USD.  During August Bitcoin surrendered its gains, and it fell to as little as $9,325.9.  Macroeconomic turmoil was named as the reason behind the August price trends.

“Unfortunately, the perfect macro storm was erased throughout the rest of the month as these negative correlations broke down and Bitcoin and other digital assets ended the month in the red.”

Joe DiPasquale stated, “while global economic factors have served as precursors to Bitcoin price movements recently, they have not had any lasting impacts.”

Crypto markets are supposed to react to global developments and market situations; however, these movements are loosely correlated, and they are very short-lived.

To understand the price movements, some of these macroeconomic trends are pointed to, and DiPasquale asserted that the digital currency had entered a consolidation phase after enjoying sharp gains earlier this year.

Richard Newman

Richard is the Editor-in-chief of Bitcoin Journal. He has over 10 years of experience with the news industry mainly handling the editorial cycle.

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