Bitcoin has been on a downward trend recently, and after several recoveries, it is still far from its all-time high. A variety of indicators indicate bullish and bearish tendencies, although they mostly appear to be in the center.
The fractal was first noticed by CryptoBullet, an independent market watcher, and depicts Bitcoin replicating an inverse head-and-shoulders (IH&S) pattern that foreshadowed its price drop to $3,100 later in December 2018. As a result, there’s a chance that BTC’s price will fall by the same amount in 2022.
This is due to the significant similarities in pricing trends between the price declines in 2018 and 2021–2022. For example, while developing the IH&S pattern, Bitcoin made two higher highs in April and May 2018 over $10,000 before plummeting below $6,000 in July.
Bitcoin, interestingly, followed a similar price pattern from October 2021 to February 2022, hitting two higher highs — near $65,000 in April and $69,000 in November. In early February, the price corrected to below $33,000, establishing another IH&S pattern.
BTC is now waiting for a breakout move towards or over $50,000, as IH&S is a bullish reversal pattern. Market researcher Lark Davis predicts Bitcoin will surpass $60,000 based on a similar technical scenario.
A 2018 price replica could push BTC down
However, a rise above $50,000 — or even $60,000 — may not be enough to remove Bitcoin’s pessimistic tendency. BTC’s chances of sliding toward $25,000 appear to be higher if the 2018 fractal repeats itself religiously in 2022, as shown in the graphic below.
Bitcoin, for example, broke out to the upside after its IH&S formation in 2018, reaching approximately $10,000.
BTC’s price briefly recaptured its 50-week exponential moving average (50-week EMA; the red wave) as support as a result of this, only to later break below it. The price continued to fall, eventually reaching the 200-week EMA (the blue wave) near $3,000, where it bottomed out in December 2018.
If the same fractal is applied to the current price movement, Bitcoin could finish up closing above its 50-week EMA and achieving levels in the $50,000-$60,000 zone. Nonetheless, it will return to the bottom of the red wave and continue to fall towards the 200-week EMA, which is approximately $25,000 at this time.
The bearish outlook is consistent with what independent market expert Ari Rudd said on Twitter on Feb. 14.
Source: https://coinpedia.org/bitcoin/bitcoin-btc-price-might-drop-below-30k-if-history-repeats-heres-why/