- Bitcoin is sitting on a support line stretching back almost seven years
- This is the multi-year support line left for Bitcoin
- The prior two occasions have sparked a bull run
Bitcoin is sitting on a support line stretching back nearly seven years, taking in the final capitulation before the 2016/17 bull run and the March 2020 crash. Having taken out every other super long-term support line, this represents the last bastion of multi-year support. The silver lining to this cloud is that on both previous occasions Bitcoin has hit this line a bull market has followed, but this seems something of a stretch at this point in time.
Historically Important Trendline
The trendline in question dates back to August 2015, when a final flush kicked off the 2016/17 bull run:
The March 2020 wick down to $3,500 provided the possibility of a trendline being created in the future, but this wasn’t confirmed until early June and the drop to $17,600 at the peak of ‘crypto contagion’ fears. This meant that three points were all linked in line – the minimum needed for a trendline.
We can now say for sure that this is a trendline, and one that, on both prior occasions, has acted as the springboard for a move to a new high some time later – 28 months and 20 months respectively. The question therefore is, can we expect the same result again?
Bitcoin Bottom?
The answer is ‘very possibly’. While it’s not feasible to say that the bear market is over and a bull market is just round the corner, $17,600 is a very nice discount on Bitcoin, and the price hasn’t come close to challenging that figure since it happened. There is every chance, then, that that was the bottom, and price will continue to hover around the $20,000 mark for the rest of the bear market.
This price action is in keeping with the seven-year trendline, but if it is to hold true then Bitcoin cannot close underneath $20,000 on the two weekly chart at any point from August, otherwise it is invalidated.
And given how the wider financial picture looks, that’s not seeming like an overly promising scenario.
