In other words, bitcoin's price tends to consolidate in a specific pattern when in a bubble state, which eventually breaks down in the opposite direction to a near-identical distance as the height of the pattern.
A symmetrical triangle in technical analysis consists of two simultaneously converging trendlines, and is generally a continuation pattern in nature.
Using the 'opposite but equal' breakdown/out logic from before, the price should bottom out 30 percent lower than the breakdown point.
The same measure rule came into play the following year when price formed another symmetrical triangle pattern.
Although the price action is not as clean - likely due to BTC being relatively illiquid on Bitstamp at the time - it's clear that a descending triangle was the backbone of the market structure with a clear base at $5.43.
Once again, using the measuring logic from before, price should have fallen 26 percent below its breakdown point based off of its base range.
As can be seen, BTC eventually did bottom out at a price level nearly 24 percent below the point.
Now, looking at the current 2018 bear market, history has already told us there is a high likelihood the price of bitcoin will breakdown from this triangle to a similar distance as its base range,.
Usually, this would be the ideal spot for the market to bottom but since the price history above $13k does not fit in the triangle, a secondary target should be created due to the nature of bitcoin breaking down to an opposite but equal distance as its run up.
In conclusion, bitcoin's price tends to follow an 'opposite but equal' rule when recording a triangle pattern breakdown.
When Bitcoin's Price Breaks Down, It Follows a Pattern
gepubliceerd op Dec 7, 2018
by Coindesk | gepubliceerd op Coinage
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