Bitcoin (BTC) Price Action Mirrors Pattern that Preceded Epic Rally to $69,000

Bitcoin (BTC) Price Action Mirrors Pattern that Preceded Epic Rally to $69,000

Bitcoin has dropped more than 60% from its all-time highs in November 2021 and is now trading below the $20,000 level.

Naturally, there has been a lot of speculation as to what is going on with BTC's price action, what the cryptocurrency is doing now in terms of price, and what it might do in the future.

One of these facts of speculation is an observation by PlanB, a prominent crypto analyst, of how bitcoin's price action may be doing exactly what it did before it got catapulted to its $69,000 all-time high.

In a tweet, the crypto analyst mentioned that "$20k is the new $4k" for BTC.

Bitcoin's Price History

Anyone who has been in the crypto market for long enough would know that Bitcoin's price dips are always historical. Every few years, the cryptocurrency hits an all-time high and then plummets to a fraction of its original value before another pump to new highs.

The same happened in late 2017 when Bitcoin broke the initial $19,000 resistance to the upside. Soon after this breakout, Bitcoin plummeted to $4,000 over one year, staying at this low until April 2019, when it started to trend upwards with renewed momentum.

This upside momentum continued for another two years, catapulting bitcoin from a low of about $4,000 to an amazing high of $69,000 in November 2021.

Chart showing historical price action of bitcoin | Source: PlanB's <a href=";t=nEt_YW3bvrqeVMNcVzHDYg"><u>Tweet</u></a>
Chart showing historical price action of bitcoin | Source: PlanB's Tweet

According to PlanB, bitcoin's price action currently mirrors this historical pattern and presents opportunities for institutional and retail investors to go long.

"Great buying opportunity," PlanB says in another tweet "(like 2011, 2015 and 2019) or this time is different, that is the question".

Correlation with the S&P 500

The Standard and Poor's 500, or more commonly the S&P 500, is simply an index that tracks the performance of the top 500 companies listed on stock exchanges in the US. It is one of the most followed indices and was only recently observed to have a correlation to Bitcoin when both crashed almost simultaneously.

However, the correlation between the S&P 500 and Bitcoin has always been there, even in the early stages of bitcoin's growth and its rise from $1 to the $2,000 mark.

Chart showing the correlation between the S&amp;P 500 and Bitcoin | Source:<a href=";"> PlanB/Twitter</a>
Chart showing the correlation between the S&P 500 and Bitcoin | Source: PlanB/Twitter

According to PlanB, some of the shorts going on with bitcoin are from investors who bought around $60,000. Most of these investors are now accepting their losses and choosing to sell to prevent further losses.

Other sources of bitcoin shorts are from traders who bought the cryptocurrency below the $15,000 mark and are now taking profits before Bitcoin potentially falls further.

Bitcoin Whales Remain Highly Active

Amid some of the big moves by the bitcoin whales, one such is the sudden reactivation of about 80,000 BTC in total, being moved from Coinbase Pro.

According to reports, 48,000 out of this 80,000 bitcoin stash (worth about $941 million) were moved along with another tranche of 32,000 BTC laying dormant for 3 to 5 years, as revealed by Maartun, an author and analyst from CryptoQuant.

About 11,280 out of the original 48,000 had been there for up to five months, according to Maartun, while about 4,560 had been dormant for up to a year.

The information surrounding this recent move by the whales is still in mystery, leading the crypto community to panic less than it would have.

However, despite the movement of this large amount of bitcoin seeming relatively harmless, it is still very capable of influencing market sentiment over the long term.

Disclaimer: The author's comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR  (do your own research)

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