Bitcoin may head higher in the coming sessions based on its price action’s similarities with a fractal from June 2020.
First spotted by TradingShot, an independent trading signals provider, the fractal boasts about a support level near $9,000 that stood firm between June 25 and July 21 this year. Traders attempted to break below the floor for 26-days straight but failed every time owing to a higher buying sentiment around it.
Meanwhile, the same period saw a so-called “LMACD Squeeze.”
Strong Bitcoin Accumulation
In retrospect, LMACD stands for Logarithmic Moving Average Convergence Divergence, a technical indicator that shows the relationship between two moving averages of an asset’s price. Meanwhile, the term ‘Squeeze’ points towards a big breakout move, based on Bitcoin’s historical reaction to the growing proximity between Signal Line and MACD output.
The last occurrence of LMACD Squeeze coincided with Bitcoin’s consolidation above the $9,000 level. Later, the cryptocurrency underwent a massive breakout move towards $10,500.
Bitcoin is looking to repeat the June 2020 fractal. Source: TradingView.com
TradingShot noted Bitcoin in a similar upside setup as the cryptocurrency attempted to maintain a price floor above $10,000. At the same time, it logged a similar LMACD Squeeze scenario, leading the chartist to expect a lengthy bull run ahead.
“That is the perfect example of strong accumulation if you ask me,” said an analyst from TradingShot. “So if we see something similar this time around, you probably know what it would mean.”
Conflicting Macros
The statement also appeared as BTC/USD struggled to break above a technical price ceiling near $10,400 despite repeated attempts. The pair on Sunday briefly closed above $10,500 only to pare those gains entirely.
The pullback brought BTC/USD back inside the $$10,00-10,400-wide trading range.
Bitcoin continues to trade erratically inside the $10,000-$10,400 range. Source: TradingView.com
Some observers decided to watch macro fundamentals to anticipate Bitcoin’s next moves. Tyler Winklevoss, the co-founder of US-based Gemini crypto exchange, cited the European Central Bank’s monetary policy meeting on Thursday to make a bullish case for the cryptocurrency.
“The European Central Bank’s refinancing rate is 0% and its deposit rate is -.5%,” he said based on ECB’s head Christina Lagarde remarks. “This means it is free to borrow money, but actually costs you money to save. This is both a potent recipe for inflation and powerful advertisement for Bitcoin.”
Meanwhile, Kevin Svenson expressed his concerns over a bearish pullback in the US stock market. The analyst stated that a further correction in the S&P 500 would put Bitcoin en route to lower levels. (Read more: A Bearish Reversal in Stock Market May Bleed Bitcoin)
Bitcoin-S&P 500 Correlation. Source: TradingView.com
Bitcoin and the S&P 500 rose in tandem from their mid-March lows, their rallies led by the US Federal Reserve’s relentless bond-buying and lower interest rates.
BTC/USD was trading 13.43 percent lower from its year-to-date top near $12,500. The S&P 500 was down 6.89 percent.
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