THELOGICALINDIAN - Bitcoin has accepted the attendance of a standalone abstruse indicator that could accelerate its amount bottomward to 7700
Dubbed as Diamond Top, the fractal arrangement appears back an asset forms “higher peaks and lowers valleys,” eventually accoutrement the amount activity in a diamond-shaped area. Discovered aboriginal by arresting abstruse analyst Tom Bulkowski, the indicator is hardly bearish, for its accident leads the assets to abatement 57 percent of the time.
A arbiter description of the Diamond Top commodity highlights alternating formations of these characteristics: Uptrend, Shaping, Higher Peaks Lower Valleys, Touches, and Breakout.
Pitting them adjoin Bitcoin’s accepted price movements paints a agnate scenario.
The cryptocurrency was trending upwards (point A to B); it formed the design appearance (B to C), it affected anniversary trendline at atomic alert and is now attractive to abide a breakout. 57 percent adventitious that the abutting move is to the downside.
Another Resistance
The Diamond Top blemish point is at C, as apparent in the blueprint above. The choice coincides with a 2.5-year-old Descending Trendline attrition that has capped Bitcoin from extending its upside moves. The cryptocurrency’s seven latest pullbacks occurred attributable to the aforementioned amount ceiling.
The Descending Trendline attrition apparently validates the blemish that could arise out of the Diamond Top pattern. The affairs burden abreast the assemblage would be higher, arch to amount falling aback to retest its 200-day affective boilerplate (orange).
Coincidentally, the abutment beachcomber additionally avalanche abreast the Diamond Top’s blemish target.
Bitcoin Price Target
Bulkowski states that “the blast armpit (downtrend end)” afterward the Diamond Top blemish is “often abreast the amount akin of the barrage armpit (uptrend start).”
That said, bitcoin risks falling aback appear point A afterwards its breakout. The said downside ambition is hardly aloft $7,700 – the aforementioned akin offered abutment to Bitcoin’s downtrends in September 2019, October 2019, January 2020, and March 2020.
Meanwhile, there is still a 43 percent adventitious of Bitcoin abnegation bears. Should that happen, the cryptocurrency would acceleration by as abundant as the acme of the Diamond Top. That puts its upside blemish ambition abreast $11,800.
