There is a high probability that Bitcoin is starting a new bull run.
So this is my second video of 2020, and believe it or not, I was not planning to make a video tonight because as I'm making this video right now, it is a 10 47 a GMT UK time. So I wasn't planning to make a video at this time of the night. The reason I'm making this video right now, it's because there's something very interesting I'm seeing on the charts here of Bitcoin before I tell you about something important that could happen here on Bitcoin, potentially the next few days, maybe the next few weeks as well. Let me just draw your attention to this chart first. This is the chart of Bitcoin last year and at the beginning of 2019 now, here's the, here's why I'm looking at this chart right now. You see guys at the end of 2018, and the start of 2019 fascinating pattern emerged on Bitcoin, which I think is repeating right now on the chart of Bitcoin.
So what we see right now, the charter, the Bitcoin is very similar in my view to what happened to the charter Bitcoin last year. And I would say the beginning of 2019 takes a look at this chart. Then you'll see something. Again, this is the drop in the price of Bitcoin in 2018 that we can see here. So significant decrease as you can see here again in my view, capitulation occurred on Bitcoin back in 2018 right here. Uh, then we had a bounce. Now here's what's interesting. Notice that as the price of Bitcoin crashed into the 3000 almost 3,100 regions here, we also saw something else to the drop in volatility. Notice the volatility on the ATR here, ATR 14 setting volatility dropped, dropped, continued to drop further. And as I mentioned before, guys, you may recall my video from December, I think it was when I said we need to see Bitcoin losing volatility drops significantly.
So that's the first important thing I'm looking for. That's very important. Here's the second thing. The second thing you'll notice here, apart from the drop in volatility, the second thing is the fact that Bitcoin started to make this resistance structure. So it built an edifice of resistance around this area. 4,100 approximately. Okay, so this four thousand four thousand one hundred area here that you see in this blue line, I can just throw it up one more time here. As you can see, it became essential for Bitcoin. Notice how many times Bitcoin tested this area. Four thousand one hundred again notice once, twice, three times. And finally, it broke this level with this huge price bar here. And this price bar actually broke the resistance structure and started the major rally, the major again, skyrocketing surging rally in Bitcoin that we saw in the spring of 2019 they will see here, okay, so I think we could be on the verge of something similar perhaps in the coming weeks provided we break a similar structure of resistance like we did in 2019.
By the way, something else also happened in 2019 is this a notice that the cycle of power, uh, this indicator you see here, it went from extreme oversold, this shaded area here, this dark shaded area here. It went then into the positive territory here. And more importantly down here, uh, again, when we see the cycle of power going into the green zone with followed by the brick of structure, that can often also be a very bullish signal there followed by volatility. Again, losing its strength. So let's go over here. So I'm looking at a chart of Bitcoin right now. Still, I'm making this video on the 6th of January at 10 50 GMT UK time. By the time you're watching this video, the price of, again, the chart may have changed slightly, but I don't think it's going to change that much. But here's what I'm looking at.
Notice again, something exciting on this chart that after this huge drop that occurred in the price of Bitcoin, as we saw in 2019 into this level, what we saw here is a false breakout. Now, this is an exciting notice that Bitcoin mix one low here, okay, one flat, then it comes back about a month afterward in December, breaks that low and then quickly rallies off again in technical analysis, and I'm sure you probably know this is called a false breakout, a false spray cath of support. Okay. A false break of support in technical analysis is often a bullish signal. All right guys, let me just repeat it. It's very important. A false break of support of supporting structure is often a bullish signal and this is exactly what we have so far. As you can see here, notice that Bitcoin breaks the prior supporting level, okay?
By a few points and then quickly rallies off. In my view, that is a classic false brick structure. Okay. Now apart from the false breakout of support, which seems to form the sort of a sort of a double bottom formation, perhaps here possibly if he break the next resistance, then we also have divergence. So notice we have positive divergence on the charts. Okay. So we have a, as you can see here on the chart here, a positive divergence signal. Okay? So what does that mean? It means Bitcoin mix a lower a lower low, but the momentum on divergence makes a slightly higher low, causing a divergence. In this case, a bullish divergence. We also have the cycle of power cycle of power going from again, shaded area of oversold, so oversold from red going now into the green zone. So notice that the cycle of power is going from, uh, oversold red into the green and something else.
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Volatility. Okay? So volatility has dropped also dramatically. So since my video back in December, we've seen volatility continuing to drop lower and lower. Okay? Which is what we want, because I mentioned back in December, we need to see volatility dropping significantly, just like we saw in previous major bottoms, like we saw, for example, in 2019 and 2015 and so on and so on. So what I'm looking at right now is a key structure of resistance on Bitcoin, which is at this level here. You will see that similar to what we saw in 2019, uh, 2018, 2019, we're seeing this level here at 77 60 becoming important. Now. We've tested this level now almost, well almost I would say two or three times. Um, you might call that a maybe a third time, but it looks like this level can be very important here. Again, we've tested this level once, twice, three times almost here and now we're approaching this level again.
This is now probably the fourth time we're visiting this level of resistance. A, you might want to say third or fourth time, but I think on the balance of probabilities, it looks like we might actually break this level maybe in the next few days, maybe next few weeks. Who knows? But it does look like we're coming close now, guys, to potentially break in this level. It might be sooner than later. Uh, let's see how the week closes. Uh, it might actually be the case that we might break this level to the upside, but here's, here's the bottom line guys. I'm going to make it simple. If Bitcoin breaks resistance, and you may remember guys in my previous video that I published just a few days ago, I said if Bitcoin bricks a key resistance, we could actually confirm the pattern I showed you. I showed you in the previous video that the momentum on the weekly chart is beginning to lose momentum.
The weekend momentum is going from negative to less negative, so that's often a bullish signal if Bitcoin now breaks this level of resistance that we're seeing here on this chart. Again, this is the level I'm looking at here, 77 60 approximately. If Bitcoin manages successfully to break and close again, we want to set the price bar closing above that resistance. Okay? If we can close above that level of resistance, this increases the probability that we could go into a bullish phase on Bitcoin. Quite a strong bullish phase, in fact, so anything above this level. So just to make this very simple, so anything above the 77 60 level here for me is bullish. Okay? If Bitcoin can cross the border and go from beneath this level, from this zone into the upper zone here above 77 60, and that's zone, I would be very bullish.
In fact, I think that Bitcoin could start a major bullish rally here that could take us a quite significantly higher. How do we know that this won't be another false breakout or another false rally like we did in, uh, you know, back in October, November, right? Because in October we had a similar sort of rally like that. This ended up failing, right? So how do we know that this next breakout, let's say this rally, let's say the next breakout caused a rally like similar to October, right? So you might well ask, it's a very good question. How do we know that the next rally won't end up being a failed rally, a false breakout like that? Well, here's the thing guys, we don't know. There's no way we can know possibly that the next rallies are going to be a failed or successful rally. The bottom line is guys, as I'm sure you probably know, this is a game of probabilities.
There are no certainties, there's only probabilities. So bottom line is we don't know if the next rally is going to succeed or fail. Let's see what the price tells us and there are ways we can actually find out if the rally is going to succeed or not. So just to be clear, if Bitcoin can successfully break above this level of resistance, again, this level I mentioned here in this video, if we can close above that level and remain above it, I'll be bullish our guys, but below this level, I'm not interested. So anything in this zone, let me just draw that here on the chart. Anything in that blue zone that I've just drawn here, I'm not interested. If we can get above that level, okay. And stay above that level. So anything in this zone here, I would be bullish. Also just to mention here that it seems we're forming a sort of a higher low here on the chart.
I mentioned this before here, the signs of a higher low here on Bitcoin, and if this can break out to the upside, this could actually initiate the signs of an uptrend. And perhaps the next major bullish phase in Bitcoin at the wild card scenario that I mentioned previously. All right, guys, hope this video helps. If it has a please give it a thumbs up and also please subscribe a future videos and hit the bell icon. Also to be notified about future videos as well. Thanks very much indeed, LC guys, and next video updates. Bye for now.