Parabolic Bitcoin Indicator Points To Dangerous Collapse To Below $20K

Bitcoin price is in a downtrend, after spending nearly a full year in a parabolic uptrend. An indicator bearing the “parabolic” name on monthly timeframes has given a signal, that according to past instances, has always resulted in a catastrophic fall in the top cryptocurrency by market cap.

Even if the resulting selloff ends up being the weakest ever following such a signal, it still could put Bitcoin at risk of a plunge to below $20,000 per coin. Here’s why.

Remembering The Now Broken Bitcoin Uptrend Through Now

2020 was the perfect storm for Bitcoin and the rest of crypto. Talk of inflation, a supply shock, and nations in turmoil caused investors to flock with the scarce and innovative emerging assets.

Institutions, hedge funds, and even corporations began to pay attention to Bitcoin, and the greater crypto market began to boom due to Ethereum, DeFi, NFTs, and Dogecoin.

Related Reading | Bitcoin Bulls Bring Out Hammer Of Thor Reversal, But Support Must Hold

More big names have been drawn to the space than ever before, and Bitcoin is now in the portfolios of the wealthy around the world. The scramble to buy BTC before everyone else sent the price per coin on a parabolic uptrend, and took it from under $4,000 to more than $65,000.

All the attention helped take Coinbase public, but since then Bitcoin and the rest of crypto has been in a downtrend, and it could get a lot worse now that the parabola has been broken.

bitcoin parabolic sar

The Parabolic SAR hasn't been hit many times in Bitcoin's history | Source: BTCUSD on TradingView.com

Why The Parabolic SAR Could Be Warning Of Further Crypto Collapse

When Bitcoin price broke its parabolic advance in early 2018, iconic trader Peter Brandt famously called for an 80% correction, give or take a few percentage points on either side. A year later the leading cryptocurrency by market cap plummeted to its bear market bottom for a full 84% retracement.

A tool that can help tell traders when an asset has gone parabolic, and through…

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