Building The Case For A Potential Bitcoin False Bottom

Bitcoin price action is fickle lately, moving mostly sideways with a number of unsuccessful breakout attempts. The fact that $30,000 simply won’t break brings back memories of a signal of a downtrend. A lower low was finally formed in late November 2018, when Bitcoin broke down to its Analyzing The Critical Bitcoin June 2021 Monthly Close

From there, news about a potential Facebook-led cryptocurrency and the Bakkt cryptocurrency exchange drove the bullish narrative – and with it prices toward $14,000.

After the rejection, Bitcoin price action hovered sideways for another several months forming yet another false bottom. An early 2020 rally broke the downtrend, but again a false bottom gave way when all of crypto crashed on Black Thursday.

Will the pattern of false bottoms finally end?  | Source: BTCUSD on TradingView.com

Bitcoin Price At Risk Of Another False Bottom Fakeout

Bitcoin has once again found itself trading sideways, grinding against support that so far cannot be broken. Weeks worth of attempts have failed, and bears barely got a taste of below $30,000.

But that taste has bears salivating for more, and it is up to bulls to make sure Bitcoin doesn’t get there. The only problem is, the weekly Relative Strength Index has fallen to the level where in the past acted as the so-called “false bottom.”

Related Reading | Bull Signal From Bitcoin Bottom Is Best Hope Yet For Continuation

When this phony bottom holds and a bounce follows, the rejection picks up enough momentum to get back through on the next attempt. The pattern fits the bill of an ABC correction, where the C wave is always lower than the initial correction A wave. B wave is in the opposite direction of the correction and may or may not have happened yet.

Will Bitcoin take another plunge through support eventually? What the cryptocurrency has on its side, is hope, and a rising trend line on the same Relative Strength Index. You can read the bullish take here.

Follow @TonySpilotro on Twitter or via the TonyTrades Telegram. Content is educational and should not be considered investment advice.

Featured image from iStockPhotos, Charts from TradingView.com

Source: https://www.newsbtc.com/analysis/btc/potential-bitcoin-false-bottom/