Bitcoin price has been in a strong uptrend since Black Thursday, which became completely parabolic in the fourth quarter, leading to a new all-time high. However, according to an analyst, the first cryptocurrency is on the verge of collapsing a parabolic curve that has been supporting upward momentum for months.
Is this the end of the uptrend? Or is this just another touch of the parabolic support before it blasts off to another higher level?
Bitcoin will go parabolic in 2020. What’s coming in the new year
Bitcoin price is $ 1,000 below its 2020 high but is holding onto support before the start of the new year. The leading cryptocurrency by market capitalization is the standout investment of the year, delivering positive portfolio performance amid economic uncertainty and a dying dollar.
The perfect storm for the cryptocurrency was combined with institutions that suddenly saw the asset’s potential as a store of value and a hedge against inflation.
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The surge in FOMO from high wealth buyers has brought Bitcoin to where it currently is and has caused support to take a parabolic shape.
Every correction has been bought with such anger in recent months that price action has gone almost straight up, which, according to a cryptanalyst, could cause the parabolic curve to collapse for the first time.
Bitcoin’s parabolic curve could be ready to collapse Source: BTCUSD on TradingView.com
Incoming correction or is crypto volatility going vertical?
Bitcoin’s uptrend began either December 2019 or Black Thursday, depending on how you see it. The black swan event was an anomaly and the crypto-asset continued to rise immediately afterwards.
If anything, this resulted in the largest buying opportunity in the history of the asset, resulting in a 500% ROI in just one year.
However, a collapse of the parabolic curve could lead to a temporary bearish phase – or just as easily cause the asset to continue rising in an upward trajectory.
Past parabolic curves for comparison | Source: BTCUSD on TradingView.com
Earlier cases of parabolic curves show both conclusions. In 2016, the parabolic curve persisted, while it collapsed in 2019, resulting in several months of bear market.
Another parabolic shape might lose support now, but what scenario will it come next? Given how strong the uptrend has been with very little correction, a short term trend change is possible and does not mean that the long term uptrend is a lost cause if prices fall from here.
Related reading | Bitcoin Dominance In December: Why The Future Of Altcoins Hangs At The End Of This Month
Just like Black Thursday, shakeouts are attracting new investors so the price can go up in a healthy way. When assets rise too quickly, sell-offs become just as uncomfortable.
For now, keep watching as price promotions take shape, pun intended.
Featured image from deposit photos, charts from TradingView.com
