Bitcoin Rally Similarities – Is This The Peak?

The recent rally in Bitcoin is strangely similar to the rally that took place in 2017. Although the range of price throughout the rally is somewhat different, the structure of price throughout the rally phase is very similar. We believe this similarity suggests a peak may be forming in Bitcoin and the big volume on Monday, December 21, 2020, may have represented a “blow-off peak” in price.

BITCOIN 2017 PEAK STRUCTURE

The following Weekly Bitcoin chart highlights the three rally phases that took place before the peak level was reached in December 2017. Pay very close attention to the structure you are seeing on this chart and the highlights we’ve made to help you understand how the price structure is being mirrored in the current rally phase.

Initially, we saw a $2100 rally in Bitcoin which setup a peak near $2980 that initiated near March 26, 2017 (the first Green Arrow on this chart). After, a mild correction took place which setup a deep trough on the RSI indicator (in the lower pane of this chart). Notice how this deeper low level in RSI set up a momentum base for future trends. Then, a second rally phase pushed Bitcoin prices higher to $4979 – spanning a rally phase of nearly $3050 (the second Green Arrow). This second rally initiated near July 2017 and was followed by another brief consolidation period. Lastly, a breakout rally initiated in October 2017 and reached the peak price level on December 17, 2017, near $19,666.

Next, pay attention to how the end of the rally phase broke below the support channel on the RSI (in RED) and began an excess phase contraction of over $16,000 (-84%) that lasted until December 2018 (near $3135). Are we witnessing a mirror example of this same type of price action in the current Bitcoin rally?

BITCOIN 2020 PEAK STRUCTURE

This next current Bitcoin Weekly chart, below, highlights the similarities between the 2017 rally and the current rally phase. Although there are minor price range variances related to the size and scope of the different price wave structures, the technical setup is almost identical to the 2017 rally phase.

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