The recent bullish outbreak in Bitcoin has caused a massive surge of FOMO so late in the game that buyers are trying to get in before the cryptocurrency soars to a new record.
But a keen-eyed crypto analyst has spotted a fractal in Amazon’s post-dot-com bubble-crash recovery that ties in closely with the cryptocurrency’s recent price action. If the fractal does play out, and there could be some merit behind the expectation thanks to a rare harmonic pattern, there could be a significant Bitcoin crash on the horizon.
Amazon Fractal should act as “anti-FOMO” for Bitcoin buyers, analysts warn
Cryptocurrencies have regularly made comparisons with the early dot-com days, when projects popped up by the dozen, all bragging about being the next big thing, but instead failing to keep their promises.
The sky and capital eventually came running out of both bubbles, returning the valuations to reality. From the ashes of the dot-com bubble rose the giants of today Facebook, Microsoft, Google and Amazon.
The same could happen again in crypto, and after one bear market, future winners such as Bitcoin and Ethereum are booming.
But just like those days when the winners began to stand out from the crowd, the leftover overly bullish sentiment was used to torment bull who thought a full recovery was in effect.
Amazon stock shares' post-dot-com recovery had one last rug pull | Source: AMZN on TradingView.com
When Amazon hit its first higher high after a higher low, investor enthusiasm rose too quickly and too soon, and a final correction made it even more difficult to guess if a bull market was back.
In the above chart, AMZN shares plummeted more than 66% after a parabolic surge that took the stock price to its first high after the bursting of the dotcom bubble.
A crypto analyst sees several similarities between AMZN stock back then and Bitcoin now, according to the chart below.
A pseudonymous crypto analyst sees similarities in crypto charts | Source: BTCUSD on TradingView.com
Could a bearish Gartley harmonic pattern give the crypto market a final crash?
A 66% collapse would bring the Bitcoin price back to USD 5,550, and would certainly scare the crypto bulls confident that the asset will soon rise above USD 20,000.
There is also no denying how bullish Bitcoin’s high timeframe chart currently looks, and that’s next to it no BTC available on exchanges that can even be sold in the market. So what could be causing the sudden change?
The collapse of the stock market from secular bull market highs could be a trigger. But it could also be a pure market dynamic at work, depicted by a huge one bearish Gartley formation which has formed on BTC charts with a long time frame.
A bearish Gartley harmonic pattern could be the culprit that causes a crash | Source: BTCUSD on TradingView.com
A Bearish Gartley is a rare harmonic pattern, which must follow certain measurements in price and time to become valid. While not a perfectly formed Gartley, if Bitcoin stops here, the final high could be the pattern that returns the cryptocurrency to test much lower.
Gartley targets typically track Fibonacci retracement levels, as do the measurements in the pattern. Typical targets for such a pattern are often at the retracement level of 0.618, or equivalent to a crash of about 40%.
Bitcoin bull market corrections often reach a severity of between 30-40% according to previous cycles, bringing Bitcoin to around the mid $ 8,000 mark.
Featured image from Deposit Photos, Charts from TradingView.com via HornHairs on Twitter