Nerves are on edge in many places and a great deal of uncertainty is making the rounds. But perhaps completely wrongly?

At least as far as the Bitcoin course and its development is concerned, as I will show here today, everything could just follow old patterns. As a result, the Bitcoin course could have found its bottom very soon and announce a new all-time high (ATH) that will exceed the expectations of many.

Bitcoin course leaves 10-year-old trend pattern

On Thursday 12 March 2020 many were shocked. The Bitcoin share price, triggered by the general stock market crash and due to the insufficient liquidity in the market, collapsed extremely quickly. But this fact alone was not the reason why there is so much uncertainty in the market at the moment. Rather, it was due to the fact that the Bitcoin price had broken out of a channel that had been able to predict the growth curve of the Bitcoin price very reliably over a period of 10 years.

According to this, the bottom for the Bitcoin price would have been around $7,700. Currently, the Bitcoin price is trading at just over $5,000, which is well below this level.

It has required a so-called Blackswan effect to cancel out this channel as a reliable indicator. This Blackswan effect is our current economic crisis, whose catalyst is the coronavirus. But if this channel is no longer valid, what else can we use as a guide? Or does it even mean that the growth of Bitcoin there has ended forever?

What does the sharp drop mean for the Bitcoin price?

Once you consider that the fundamentals behind Bitcoin have not changed over the last week and realize that Bitcoin was designed for reasons like the current ones that are shaking the entire global economy, you know that this sharp drop in prices is mainly due to 2 circumstances:

• Lack of liquidity: Bitcoin is still too young and the market too small to develop its price in a truly autonomous manner.
• Compliance rules for the risk management of institutional investors, who had to liquidate their Bitcoin positions, while many retail investors acted in panic.

This, in turn, implies that the sharp fall in prices was, at least in part, not rational and thus unfounded. At least if we assume that Bitcoin was not previously overvalued. However, the latter is not completely absurd, as the price increase at the beginning of the year could well have been triggered by the pricing of Bitcoin Halving in May. Even if this may be partially true, this is of course not the reason for the sudden and strong price slump. But would we possibly have been stranded before the Bitcoin Halving anyway at the current price level? The following indicator speaks exactly for this thesis. At least if one assumes that the old pattern has the habit of repeating itself.

Does the Bitcoin course only repeat old patterns?

How do I arrive at the above statement? Quite simply, the logarithmic growth channel is not the only old and reliable indicator, although it was one of the most important. Perhaps it will be again if the Bitcoin price manages to shoot above $7,700 in the short term. Even if Bitcoin's price performance shows us again and again that we still have a lot to learn, even though we actually thought we were getting the hang of it, I still think it's rather unlikely. But of course it is not impossible!

But today I would like to talk about another almost as old and reliable channel. The top channel of Yope. Not only has it reliably predicted the tops and bottoms of the Bitcoin price since early 2011, but more importantly, it has marked the bottom of last week's Bitcoin crash with its lower trend line.

Furthermore, this channel shows that the current price action came very suddenly, but its direction is anything but unusual. If we zoom out a bit, we can see that the Bitcoin price has returned to the bottom of its channel before each of the 2 Halving Events so far. This was the case for the Halvings 2012 and 2016 and now seems to be true again.

Is the ground at $4,400 and the next ATH at around $80,000?

If this channel actually holds and old patterns repeat themselves, this means 2 things for the Bitcoin course:

• At the time of the halving, the Bitcoin price will be trading at around $4,400.
• The new all-time high is formed in about 1 year after the halving event and would be around $80,000 according to the channel.
  
  

However, there are two things to note here. Since 2011, it has only happened once that the Bitcoin price has traded below the channel's lower trend line. This was the case from August to October 2015, before the Bitcoin price found its way back into the channel and has not left it since.

The second point is that the first all-time high in our view was found almost exactly 12 months after the Halving Event 2012, while the second Halving Event 2016 took 18 months in total. So even if this channel will remain valid, time variations are very likely. The following rule applies: The earlier the Bitcoin price reaches the channel's upper trend line, the lower the all-time high in this halving period will be, and vice versa. In any case, exciting times are sure to come.