On March 19, the BTC price initiated an upward move and increased above $6,000. This was an important resistance level that the price had been struggling to break out from since March 13.
Bitcoin (BTC) Price Highlights
- The Bitcoin price has made two failed breakout attempts since Feb. 10.
- It broke out above $6,000 on March 19.
Well-known trader @MacnBTC tweeted a BTC chart that shows a similar pattern that has transpired thrice since February. In it, the price barely breaks out above the previous resistance line before sharply dropping. He believes the same thing will transpire now, where a failed breakout above $6,200 is followed by a sharp decrease.
https://twitter.com/MacnBTC/status/1240623296367988736
Below, we will take a closer look at the BTC price movement and determine if the same will transpire this time around.
Breakout Pattern
Since the tweet, the BTC price has already broken out above the previous resistance and reached the $6,200 target, which is supposed to act as a high and reverse the trend.
The other two events transpired on Feb. 19 and March 7, at a price of $10,000 and $8,800, respectively.
The Feb. 19 failed breakout was preceded by a roughly 10% price decrease. The price initially struggled to break out above the $10,000 level, but once it did, it increased by 2.5% before crashing rapidly.
The March movement was very similar, except the fact that it was preceded by a 16% price decrease. However, once the price broke out above the $9,000 resistance, it increased by a very similar 2.8% before crashing.
Therefore, in this case, the preceding decrease did not change the magnitude of the increase after the breakout.
The main difference in the current movement is that it was preceded by a massive 50% price decrease.
In addition, the price has broken out above the $6,000 level and increased by 6.34%. While this increase is much bigger than the two preceding it, we have to take into account the fact that the decrease preceding it had a much higher magnitude.
If we compare the decrease/increase ratio of these three movements, it is “4” in the first movement, “6” in the second one and “8” in the current movement.
Therefore, the price could increase by as much as 12% ($6,700) and still be considered within the parameters of the two previous moves.
To conclude, the BTC price has finally broken out above the $6,000 resistance area. A fractal that has transpired twice since February suggests that the price will reach a maximum high of $6,700 before decreasing rapidly.
