If you’ve perused Crypto Twitter at all over the past months, you’ve likely seen the term “Bitcoin echo bubble” mentioned incessantly.
There are some investors that believe that Bitcoin’s current price action is effectively a “do-over” of 2018’s Crypto Winter — in other words, this market may be in the midst of Crypto Winter 2: Electric Boogaloo.
Bitcoin Repeating 2018’s “Crypto Winter”
2019 has been an absolute roller coaster for the cryptocurrency market; Bitcoin has traded at $3,500 and $14,000 and everywhere in between. Due to the volatility and shape of the price action, many have likened 2019 to 2017’s bubble and the subsequent burst of said bubble. While some permabulls have laughed this off as pure conjecture, an up-and-coming analyst that goes by “Velvet” has drawn attention to an eerie fractal.
The analyst pointed out that in the bear market of 2018 and 2014/2015, Bitcoin broke down from its 21-week moving average (MA), bounced from the 55-week MA, retested the 21-week MA to break down further, then lost its 55-week MA in succession.
Funnily enough, BTC seems poised to play out this cycle yet again, having lost its 21-week MA, bounced off the 55-week MA, and having retested and failed to break above the 21-week MA.
This cycle playing out in full would mean that Bitcoin has one more leg lower prior to the start of the next bull market.
Possible ECHO DUMP📉#BTCUSD = BEARISH🐻
I gave $BTC a chance based on LTF PA, but I don’t like how this weekly looks, I’ve seen this before!
👉 If you are waiting for a bounce from the 55EMA, then I would be careful here!
(Meanwhile #ALT CAP looks ready, see previous post)
— 𝓥𝓮𝓵𝓿𝓮𝓽 📊丝绒 (@888Velvet) November 17, 2019
What’s crazy is that this “echo bubble” theory has credence, more credence than what Velvet laid out above. A very important signal that last flipped…