Dangerous Bitcoin pattern that may destroy Bitcoin
See what you must search in chart about Bitcoin and where trend will show us that Bitcoin in danger and we must leave drowning ship right away.
Very dangerous pattern, which bitcoin must not form if it's going to avoid total disaster.
OK, so in this video I'm going to show you what this pattern looks like. I'm going to show you exactly what happens when this dangerous pattern begins to form and how you can recognize it so you can avoid a total disastrous situation.
In other words, how you can avoid being stuck in a situation where the market just keeps plunging and plunging lower and you're stuck there making losses along the way. By the way, even though I'm going to show you what this pattern looks like so you can recognize it, I'm not making this video because I think this pattern is going to happen on bitcoin. In fact, there is no way of knowing at the moment whether this pattern is going to happen or not. It's impossible to predict at the moment whether this pattern is going to definitely play out on bitcoin.
Very dangerous pattern, which bitcoin must not form if it's going to avoid total disaster.
OK, so in this video I'm going to show you what this pattern looks like. I'm going to show you exactly what happens when this dangerous pattern begins to form and how you can recognize it so you can avoid a total disastrous situation. In other words, how you can avoid being stuck in a situation where the market just keeps plunging and plunging lower and you're stuck there making losses along the way. By the way, even though I'm going to show you what this pattern looks like so you can recognize it, I'm not making this video because I think this pattern is going to happen on bitcoin. In fact, there is no way of knowing at the moment whether this pattern is going to happen or not. It's impossible to predict at the moment whether this pattern is going to definitely play out on bitcoin. I certainly hope it doesn't, but I want to make sure we at least are educated enough to prepare for it. So as the saying goes, hope for the best that be prepared for the worst.
So the purpose of this video is to show you what this dangerous pattern looks like, how you can prepare yourself for it, and immediately recognize it so you can avoid a total disastrous situation.
And as I'm sure you will agree, knowledge is power. Being better informed is certainly better than being lessened formed. OK? So let's begin.
Why do we look at patterns in the first place? In fact, why do patterns even matter? Well, let's just begin as an example. One of the most important patterns we discussed very recently about Bitcoin as I'm sure you're a member, as bitcoin was dropping here, if you may remember from previous videos, what I said was this, I said, look, here's an important pattern that might develop on Bitcoin, which was a double bottom pattern. We've seen this double bottom formation happened on many different markets like stock markets, gold and yes, even on bitcoin the past. So when bitcoin was coming down to its previous panic lows. So here we had the panic low in bitcoin back in February than we had a rally. Then we had to retest. OK, came very close to that panic low and then we said now would be the time where we might actually see a devil bottom formation and that's exactly what's played out so far, so what we're seeing so far in bitcoin as an almost perfect example of a double bottom formation. Now there are other patterns that I talked about before.
For example, if you may remember when bitcoin was coming down here, when it was dropping, I said, look, pay attention to the 200 simple moving average because very likely we might see a bounce from that level. That is precisely what happened as we can see from there and essentially this pattern is when price has been away or not touched us, 200 moving average for a very long period of time. When it comes back for the first time to touch it again, that level usually holds a very strong level of support and usually bounces from it and other pattern we talked about before, which I've mentioned many times in the past, is the tendency for price to come down to the 100 moving average to do 100. Emma, look at this, and this usually happens in a bull market and an uptrend, when price comes back, has some corrections in 100 moving average and bounces from its strongly again happened again. You can see here it a 100 average and bounce from it, so patterns do repeat themselves a lot. So now let's turn our attention to the other pattern I want to talk about.
Yes, the pattern of disaster and how you can prepare yourself before this even happens as an example.
I want to show you what happened on gold if few years ago, because I think what happened on gold is probably the best example of what this pattern does. Dangerous pattern looks like, as I'm sure you'll probably remember, just a few years back, gold went through this speculative phase, this massive uptrend, and eventually bubble when it went from about nearly $700 to nearly $1,900. How? By the way, we knew that gold had entered this very speculative bubble phase at this point, and we knew this bubble was gone burst because almost everyone had turned bullish on gold at the time. In fact, there were seminars all over London and many other places about gold television adverts about gold and all that kind of stuff, and let's not forget that gold investors at the time were in complete denial that it was even a bubble at the time, and of course the rest is history. We know what happened next because essentially that bubble eventually burst and it can see what happened. Went from the peaks from $1,900, eventually went down all the way to $1,100, and let me just say this, that a lot of the people who bought gold at the time, I mean they eventually throw in the towel and many people just started selling at the worst possible time when it was eventually about to bottom. But here's the thing, before gold went through this major, important crash. See here, it was giving you important clues. You see, it was revealing to you a very simple but also very important dangerous pattern which many people chose to ignore. OK, so what is this important pattern? Let me just go through it for you. By the way, remember, even though I'm showing this pattern on gold, there is absolutely no reason why this pattern cannot happen on other markets. In fact, it has happened in other markets already. OK? So the first thing you need to see in this pattern is a major rally in major bull market, which eventually of course leads into a bubble phase and then followed by a very strong crash. In other words, what we need to see is some panic selling that leads to a panic low. As you can see, it's exactly what happened on gold and that became the panic low here on gold, you can see that was the peak and here was the low happened that just a matter of few weeks. So we're going to do here is we're going to mark this level, this panic, low, going to put a line there, OK? Now look what happened here had rallied. In fact, at the time, many people thought, OK, you know what? This is going to go back and we're off to, for example, a 3000 or 5,000 on gold. That's not what happened. He had a bounce and major rally, but look what happened next. This rally failed and eventually we came back and retested like, look, we came back and retested that low again, so let's just recap. Major panic, crash or drop that became the panic low followed by a rally. Then the retest, so we came back. That rally failed, retested that low, and then we formed another rally, hence by the way, you'll see that it's actually a double bottom pattern that became a double bottom pattern. I'm of course at that point I remember very well. Many people, many commentators were saying that, you know what? This is the bottom on gold and will now rallying to make new highs and off we go. I'm going to take out these highs and off we go to, for example, 5,000 on gold. Did that happen? Well, let's see what happened next. By the way, what I'm also going to do here is I'm going to make A. I'm going to put a line at the bottom here. Just make that line at the very blows there and look what happened next. You will see that gold once again rallied and try to get something going and try to get finally a good above these highs. It's resistance, but what actually happened is, well, let's take a look by the looks of things actually turn out to be yet another failed rally, so this rally here, the second attempt to get something going and make new highs also failed. That was the first rally which failed. In fact, I'm going to color this slightly differently. Just also failed as you can see here. Let's see what happened next, and by the way, notice, notice this low here, this low that have marked these lines that are marked. This is essentially what we're talking about here is market structure.
This is major support when the market is forming these support levels and respecting these levels. That is very important because the market is forming market structure. If you think about it, it's like a foundation of a building. We're forming a base. Performing a foundation level at the market must not break that foundation. Once it breaks that foundation, just like a building that foundation breaks, then you'd be in serious trouble. Now look what happened here. So after the second failed rally, the market that gold came back here, retests this low, in other words, touches this low again. So that would be the third time we're coming down to these lows and again, we see a, a rally, but lets you exactly what happened next. All right, so there we go again. Now another rally, and I have to tell you that again, when this rally was forming the ideas, and certainly the theory was that this is going to be the major rally. We have to now break this high and we're now have to go to, you know, 2000 gold and eventually 5,000 on gold.
So let's see what happened next. Did we manage to get finally this rally succeeding? And as you can see here, gold came back to the previous levels. This was resistance, OK? But failed once again to get anything going to the upside again, it's failed. So what happened? Well, as you can see here, once again a dropped and what happened here, let's see, OK, comes down again, it comes down, but let me just drag this back a bit so we can see it more clearly. Now, pay very close attention that low that we formed here on gold. OK, but look what happened. Ah, here we go. Now this is what happened here on gold when finally, in April 2013, it broke below and close below. That's major support that market structure. In other words, in April 2013 for the first time, gold broke market structure, and I mentioned this before in previous videos that when markets break market structure, when they go below that level, the foundation level, that market structure level, that is a very critically dangerous thing for that market to do and I'm sure you know what happened next when it broke that level, if then continued to drop much further, now he'd had a bounce. Sure, but I mean you can see what happened next year just by looking at the chart and again, pay attention to that low to those levels. So there's lines. It continued to drop and then it just continued to drop lower and lower. Now you're probably thinking that this break off the market structure, that was the first initial sign off a bear market. In other words, a major crash on gold. No, actually that's not correct. In fact, there were much more important clues before that brick. Let's just examine what they were. So let me just show you what those important clues were before we even broke that support. Before we broke that market structure. You see one of the most important signs that a market is going to break a critical support level. In other words, an important clue that a marketer could actually break it support level or market structure is what's called failed rallies and as I've already said in this video goal, try to get something going and try to come and make new highs. It did not do that. It failed. And again, that was the first failed rally. Whether to do for a second time around gold, try to make another high try to come make new highs. It failed again. That was a second failed routing and again we can see over here trying to make a third attempt that also failed in other third failed rally, so all these failed rallies were giving us important information that there were too many sellers in this market that's supply was overcoming demand, and especially those failed rallies, the failed attempts to make new highs. Those were good enough clues that this market was very likely heading for a bear market. Now, fortunately we have not yet seen any patterns like that happened on Bitcoin, but it does not mean that it won't happen, and again, I'm not saying that these patterns, this particular dangerous pattern is going to happen on bitcoin. Nobody can possibly know that it is impossible to predict that at this stage, whether that's going to happen on Bitcoin, but the good news is that if we can recognize these patterns, if it can recognize them in advance, then we can be better prepared to avoid major risk. And of course, major risk of any potential losses. Major losses. So what we want to do here, guys, is we're going to mark these levels. There's the first Lope, so again, just like I showed on the previous charts, this will be our major bull market phase, followed by the major crash. OK, the major drop there. And as you can see there, that would be our first panic low. There it is, as we know by now, I just near the 6,000 level there. Then we had the first rally, now that failed and we know it was a failed rally. OK? And we're going to put a marker on that level as well when a market this low here as well. So that becomes our base now. So remember, this is our base, OK? This becomes, this becomes our foundation level. OK? And you remember it. The foundation must not break for the structure to remain intact. All right, so the bitcoin market must now respect this foundation level that is forming here. It must respect market structure. So let's just say for example, that bitcoin manages to make another rally here. And again, we're just speculating here. Let's say for example, that this rally also failed. OK? So let's say it came up through these levels and this rally also failed to get anything going, comes down to this support level and then makes another bounce. OK? Let's actually call it a differently. There's our bounce. Now, this bounce must finally break through resistance. Here's the thing, what needs to happen? What we need to see is finally breaking through. Let me just draw a line here on my chart.
So what we need to see on Bitcoin for this pattern, not to repeat, but firstly we must not see failed rallies. Now we've already seen one failed rally right over here, but the second attempt, we need to see the second attempt finally breaking through that resistance level because again, remember if bitcoin comes up through that resistance, and again, if it fails to get above that, we send to the failed rally, then that could essentially be one of the first initial signs off this dangerous pattern repeating on bitcoin.
Remember, when a doctor examines their patient, what are they looking for when they examine your chest? When they take your blood pressure that doctors looking for signs or clues that they can determine whether there's something wrong, so in a way that is what we're trying to do here. We're trying to examine the health of the market and like a detective, we're looking for signs and clues of any potential weakness or strength in the market because if bitcoin bricks that support, if it breaks market structure, all I have to say is brace for impact because we're heading significantly lower.
The one thing that bitcoin must not do is failed rallies followed by break of market structure because if it does that, again, as a natural for brace for that could certainly be a very dangerous outcome and potentially disastrous outcome for bitcoin.