When looking at Bitcoin’s chart, it is very likely it will follow one of two scenarios in the coming months. Both of these possibilities are similar to past action exhibited by Bitcoin over the past four years.
The first scenario would be that Bitcoin is currently forming a huge cup and handle base. This is what Bitcoin did in 2019 and 2020, and it went on to have a massive breakout in the fall of 2020. It is very possible that Bitcoin may now be at the bottom of this base and will soon start to turn upwards. If this scenario does indeed come into play, I will look for Bitcoin to clear recent resistance before placing any buys.
Chart of Bitcoin in 2020
Is Bitcoin ready to build the right side of its' base?
The second scenario is that Bitcoin may be on the verge of a very serious downtrend. In 2017, Bitcoin rose all the way to $20,000. The next year Bitcoin fell precipitously to under $3,200. If history repeats itself and Bitcoin enters a major decline, it is very possible that we could see much lower prices, even down towards the $20,000 level. Moreover, a case can be made that Bitcoin is forming a head and shoulders pattern, similar to what the Russell 2000 is doing. If fear starts to strike the stock market, that may also transfer over to crypto as traders look to raise cash. Remember, no one is safe in a deep correction or bear market.
Is Bitcoin forming a head and shoulders pattern?
Chart of Bitcoin 2017-2018
Chart of Bitcoin 2017-2018
Chart of Bitcoin 2018-2019
Now here is the important part of this post- it doesn’t really matter which one of these scenarios comes to pass. It leads us to the same conclusion-this is a time for patience. That patience, however, will in time lead to a fortune. I do believe that we will soon be entering into a 21st century gold rush. If Bitcoin falls drastically, that’s great news! I will look to buy it at much lower prices after it finds support and begins to trend higher. Anyone who was properly able to do this in 2019 profited handsomely as Bitcoin rose towards the $68,000 level.
If Bitcoin simply bases here and then starts to head higher, that works as well! I will look to buy it as it emerges from orderly consolidations. For now, I’m content to sit and wait it out until an uptrend develops. While it can be frustrating to play the waiting game, it’s a much less expense habit than trying to trade against the trend. With discipline and risk management, you’ll be ready for the next opportunity- wherever and whenever that may be.
Risk right. Sit tight.
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