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A startling chart formation raises excitement—is bitcoin about to go parabolic? (BTC-USD)


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    Investing in cryptocurrencies like Bitcoin (BTC-USD) has gained traction over time, and I have been suggesting that the strategy of "dollar-cost averaging" to build a comfortable position is the way a sensible investor should approach the situation.

    While I remain cautious due to the regulatory concerns and security issues of crypto, there's an intriguing development in Bitcoin that will excite bulls – a compelling chart formation rooted in ‘advanced’ technical analysis.

    To begin, let's explore the concept of "fractals," which are patterns created by recurring processes, which occur over all time frames. Fractals, first discovered by Prof. Benoit Mandelbrot, have long been a niche technique in technical analysis in equities and are now favoured by the cryptocurrency community, possibly due to the familiarity brought about by generational factors.

    The chart we're examining highlights proposed fractals in the Bitcoin chart, and they are indeed worth your attention if you have a taste for the Bitcoin dream of the next 10x.

    If the entire pattern replicates itself, Bitcoin could be on the verge of the sort of price vertical it is famous for. Naturally, scepticism is warranted, but consider this:

    A graph with a red line Description automatically generated

    Proposed fractals in the BTC chart (ADVFN)

    As hindsight has no value, I must say that using this fractal thesis in 2020-2021 was very lucrative for me, so this is not some theoretic musing.

    Fractals don't produce mirror images but rather display eerily repeating patterns, which are similar to those found in nature. Think of it as the broccoli of technical analysis.

    Brocoli

    A close up of a green plant ( Automatically generated)

    It is a good idea to watch out for them because they suggest a driver behind the scene hammering away at the price series.

    Now, let's revisit a master fractal as seen in 2013 (which occurred twice):

    A graph showing a line graph Description automatically generated

    Master fractal from 2013 (ADVFN)

    For those in the Bitcoin x10 camp, these fractals can serve as valuable guides. However, if you identify as a "Bitcoin maxi," your strategy is dollar-cost averaging (DCA) and long-term holding, so this sort of analysis may appear as mere noise. However, for anyone who doesn’t consider Bitcoin an immortal asset, the here and now is crucial.

    Notably, the impending Bitcoin ETF project will make Bitcoin more accessible to conventional investors, and with the ‘halving’ event on the horizon there is plenty of price tension. Yet, the crypto landscape remains complex and riddled with risks, so for most, DCA remains a solid approach – unless you're ready to embrace the daring and precarious path of a ‘bold pilot’ fully committed to going all in.

    For me the way to go is to follow the example of the ‘super rich:’ don’t mess with more than 1% of your net worth in this kind of super high-risk game; 2.5-5% maybe. There are more than enough ways to lose all of your crypto outside of the price itself, so that very fact is a good reason to be extremely careful.

    This article was written by

    Analyst’s Disclosure: I/we have a beneficial long position in the shares of BTC-USD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    I am an active crypto investor and trader, and buy, sell and hold all kinds of cryptocurrency. I will likely have positions long and short in a number of cryptos at any given moment.

    Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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