Bitcoin price was stuck in a tight trading range and has barely moved in the past few weeks. The benchmark cryptocurrency shows boring price action compared to its characteristic volatility.

Looking back at historical volatility, a fractal pattern shows that Bitcoin is expected to climb into the 6-digit range.

Fractal and how history rhymes

Mark Twain said that “history doesn’t repeat itself, but it often rhymes”. Claims to be the best explanation for repetitive pricing patterns known as fractals.

These fractals resemble another point in history and help analysts predict future market behavior. The results often overlap because everything rarely comes out the same. This fact has given the fractal a bad rap, however there are some specific behaviors to be expected with Bitcoin.

BTC / USD weekly chart | Source: TradingView

For example, every breakout above all-time highs in the past has resulted in a parabolic uptrend and undeniable visual comparisons. Even so, the recent uptrend stalled when Bitcoin fell more than 50% from ATH.

However, there are multiple weekly doji candles, the trading range is tight, and volatility has dropped to critical levels. All of these signs point to a possible reaction, and when “history” rhymes, volatility is unleashed in the opposite direction.

Historical fluctuations

There are many fractal repeating patterns in nature. Price movements in financial assets often exhibit repeatable behavior such as the middle phase of a bull and bear market cycle.

Bitcoin is no different. If we look at the historical volatility indicator on the weekly timeframe, we can see that one of these cases is occurring.

BTC / USD weekly chart | Source: TradingView

During the previous bull market it became clear that the current cycle was not quite following the “just up” price action, after one of the biggest spikes in history, volatility was finally held above key levels where the final phase of the bull market begins.

Anyone who thought it was the high point of the cycle was left behind when Bitcoin saw a parabolic rally with over 900% profit.

Bitcoin is reversing trying to stay above a very similar support line and if successful it will push back the volatility along with the price movement along the parabolic line. Therefore, the current bull cycle is likely to peak in December.

Do you still think history doesn’t rhyme?

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

SN_Nour

According to Newsbtc

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page