Bitcoin price is in one strong uptrend since Black Thursday which went completely parabolic in Q4, resulting in a new all-time record. But according to an analyst, the very first cryptocurrency is close to a parabolic curve breakdown that has been supporting the upward momentum for months.
Is this the end of the uptrend? Or is this just another touch of the parabolic support before it shoots to another level higher?
Bitcoin goes parabolic in 2020, what’s coming in the new year?
Bitcoin price is $ 1,000 below the peak of 2020, but clinging to support for the arrival of the new year. The leading cryptocurrency by market cap is the standout investment of the year, delivering positive portfolio performance amid the backdrop of economic uncertainty and a dying dollar.
The perfect storm for the cryptocurrency was combined with settings that suddenly realized the asset’s potential as a store of value and hedged against inflation.
The rise of FOMO of high-budget buyers has propelled Bitcoin to where it is today, taking the support into a parabolic form.
Every correction has been bought with such fury in recent months, the price action has almost gone straight up, which could result in the parabolic curve collapsing for the first time, according to a crypto analyst.
Bitcoin's parabolic curve could be ready to break down | Source: BTCUSD on TradingView.com
Correction incoming, or is crypto’s volatility going vertical?
Bitcoin’s uptrend started in December 2019 or on Black Thursday, depending on how you look at it. The black swan event was an anomaly and crypto assets continued to rise immediately afterward.
In any case, it triggered the greatest buying opportunity in the asset’s history, resulting in a 500% ROI in just one year.
But breaking the parabolic curve could result into a temporarily bearish phase – or it could just as well cause the asset to keep climbing higher on an upward trajectory.
Past parabolic curves for comparison's sake | Source: BTCUSD on TradingView.com
Previous cases of parabolic curves show both conclusions. In 2016, the parabolic curve continued while it broke in 2019, resulting in several more months of a bear market.
Another parabolic shape could lose support now, but which scenario comes next? Considering how strong the upward trend has been with very little correction, a short-term trend change is possible and doesn’t mean the long-term uptrend is a lost cause if prices fall from here.
Like Black Thursday, shakeouts attract new investors, allowing the price to rise in a healthy way. When assets rise too quickly, sell-offs become equally annoying.
For now, keep watching how price action takes shape, pun intended.
Featured image from Deposit Photos, Charts from TradingView.com