Several signs now suggest that Bitcoin’s recent pump to $11,000 that failed to hold could have been a bearish retest and rejection from support turned resistance.
And while a bullish retest taking place at the same time has buyers confident, price action closely resembling last year’s Xi pump could be bad for the cryptocurrency.
Bitcoin Bearish Retest Theory Gains Ground Due To Comparison With 2019
The recent possible “top” at the 2020 high of $12,400 shares many parallels with the top in 2019 when Bitcoin was rejected from $13,800.
For one, both instances reached levels of extreme greed, In 2019, sentiment spike to higher extremes, but in 2020 it hovered there longer.
Both peak trading ranges eventually broke down, but what happens next will determine if history is repeating, or if the cryptocurrency is going to continue higher.
Related Reading | This Signal Could Suggest Latest Bitcoin Rally Was A Bull Trap
The peak price action formed a head and shoulders reversal pattern, which Bitcoin may have just retested and confirmed the neckline as support turned resistance.
A potential bullish retest of “meme” downtrend resistance may have given bulls extra confidence, but it also could have led them into a bull trap, before the correction deepens.
If the correction deepens, last year’s “Xi pump” may provide the map to follow toward new local lows.
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