End-of-Year Rally: Will History Repeat Itself?

December 17, 2021

Is Bitcoin Composed For Another Rally?

by Bog& Giulvezan

Bitcoin is certainly a volatility monster and this was perfectly shown during 2020 when the extremity amber listed on a lower floor $4,000 in Advance ly to stopping point the twelvemonth above $29,000. Almost 50% of all these gains came in the last two weeks of December. And yes, we are directly in the last 2 weeks of December.

So, lavatory we expect the same type of price action? Advantageously, the chart looked very different during the last 2 weeks of 2020 than it looks now.

Bitcoin was connected a hard Battle of Bull Run unequal its current price action at law, which is bearish. Since Nov 8, 2021, BTC/USD has been declining rather sharply, which reduces the chances of it adding a 50% pull ahead to the current damage. But on the other hand, Bitcoin is known to disregard conventional behavior and can literally spike raised out of nowhere.

Just look at the chart above: the entire +50% run was made with Bitcoin organism overbought on a Daily c hart above: the entire +50% run was made with Bitcoin being overbought on a Daily chart, and to a higher degree that, it was seriously overbought preceding to that arsenic well. An overbought condition means, subordinate "conventional" rules that the asset is verisimilar to decrease in price. Not the case with Bitcoin during lowest year's cod.

Chart Analytic thinking – BTC/USD

Moving along to the prevalent Department of State of Bitcoin, we can see that it is trading below a bearish trend line and below a optimistic one, meaning that it is currently in a short-term downtrend. However, from a longer-term view, it is in an uptrend and the current move over can equal considered a retracement.

Since the bearish ear seen on December 4, Bitcoin has been trading generally sideway, examination $47,000 support several times without being able to break it. This shows that bearish impulse is protrusive to fade simply it is non revelatory of an impending go off up because as we can find on the chart below, price too well-tried to break the $50,000 resistance but failed.

This shows that both sides want the necessary strength to move toll significantly. To erupt of this lackadaisical state, Bitcoin will demand some incentive, which can do in numerous forms, including news, rumors, Beaver State even tweets from high-visibility personalities.

Talking strictly from a technical view, a good place for Bitcoin to turn back its current flight is at the conflux zone created by the foresighted-term bearish trend line and $45,000 support. By the time damage reaches that zone, the Relative Strength Index will probably become oversold, which will act as a buy trigger for a flock of investors and retail traders. However, a respite of this zone volition tilt the scales in favor of the bears and bequeath open ai the door for an extended drop.