Bitcoin, an asset like no other, has created a subset of cryptos which try to emulate it and be better than it in every way. Some have come close, while the rest barely scratch the surface. Bitcoin is regarded as both the most volatile asset yet one with the most positive RoI yield.
Although Bitcoin has been around for a decade, the current price action tries to follow the trend that was seen in the first few years of Bitcoin, leading up to its halving. Halving is considered a very important event in a PoW-cryptos’ lifecycle; this point indicates halving of the mining reward, thus reminding people of the scarce nature of Bitcoin.
Scarcity is one of the important features required for “sound money” and Bitcoin has nailed it. In hindsight, a year leading up to Bitcoin’s first halving there was massive FOMO causing prices to go on a frenzy pump.
A Twitter user @MohitSorout, suggested that the rally crypto-community is witnessing is “pump for ants” and much of this “aggressive” rally is similar to the price action before the first halving.
The above chart shows how the price of Bitcoin aggressively rises before the halving and exactly near the 0.618 Fibonacci level. This rise is purely emotional and driven by FOMO and is followed by a small correction. Generally, this phase evolves into a massive bull run, much like the bull run between 2012 and 2016, or the historic bull run of 2017. According to Mohit Sorout, the last two legs will begin after the halving in May 2020.
Considering that Bitcoin has already tapped the 0.618 Fibonacci level on June 26, it is safe to assume a pullback for BTC. Bitcoin recently underwent a correction where the price of Bitcoin fell as low as $9,000.
What do you think? Will Bitcoin breach the $9,000 level and dig deeper? Or will it proceed to retest the 0.618 level and soar higher?