- Bitcoin’s price patterns in 2012, 2016, and 2020 show a recurring consolidation phase before major bullish breakouts.
- Current Bitcoin price is within a descending channel, below both the 50-day and 200-day moving averages, indicating bearish momentum.
- A key level to watch is the lower trendline of the descending channel; a break could signal further downside for Bitcoin.
Bitcoin’s current price behavior is reflecting patterns from past years, according to crypto analyst Matthew Hyland. On the social media platform X, Hyland noted, “#BTC is setting up the same way it setup last year heading into Q4 as well as how it setup in election years (2012, 2016, 2020). Every August we found bottom before trending upward heading into Q4.” This observation highlights a recurring trend in Bitcoin’s price movement, especially during election years.
Historical Price Behavior in Election Years
Bitcoin’s price action in 2012, 2016, and 2020 shows notable similarities. Each year, Bitcoin experienced a consolidation phase between July and October, followed by a sharp breakout. In 2012, Bitcoin’s price moved sideways between $8 and $14 before skyrocketing above $40 by November. This period marked the early stages of Bitcoin’s first major bull run.
Source: Matthew Hyland on X
Similarly, in 2016, Bitcoin consolidated between $560 and $660 before surging past $920 by the end of October, setting the stage for the historic bull run of 2017. The pattern repeated in 2020, with Bitcoin consolidating between $9,700 and $12,600 before breaking out and moving past $18,000 by October’s end.
Current Price Dynamics and Moving Averages
Examining Bitcoin’s price action from mid-February 2024 to mid-August 2024 reveals it is currently trading within a descending channel, characterized by lower highs and lower lows. The 50-day and 200-day moving averages are both trending downward, signaling a bearish momentum.
The price of Bitcoin, currently around $58.3k, is positioned below both moving averages, reinforcing this bearish outlook. Notably, the price appears to have bounced off the lower trendline of the descending channel, a critical level to monitor.
Source: Santiment
Potential for a Bullish Breakout?
Given the historical patterns, some may speculate that Bitcoin could again see a bullish breakout as it has in previous election years. However, the current bearish trend, indicated by the descending channel and the downward-sloping moving averages, suggests caution.
Observing how Bitcoin interacts with the trendlines and moving averages in the coming weeks will be crucial. The key level to watch remains the lower trendline of the descending channel, where a break could signal further downside, while a move above the upper trendline might indicate a potential reversal or breakout.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
