KEY POINTS

  • Bitcoin's price pattern is reminiscent of one that took place in mid-February and is in danger of collapsing again to lower levels
  • At BTC's current price level, it is susceptible to pullbacks that could potentially test the $5,000 support level
  • Searches for the term "Bitcoin halving" is at all-time highs and is indicative of people banking on the halving on May to be bullish for BTC

The market has been indecisive during the past five days in which direction to take Bitcoin (BTC) to. The flagship crypto averaged a $6,880 closing price since Saturday, with a $7,200 high that was established on Sunday and is currently trading at $6,871 at the time of writing.

At these levels, Bitcoin is deemed to be susceptible to pullbacks and could potentially hit lows that would test the $5,000 support level. A chart pattern highlighted by trader TraderKoz shows price action that is similar to mid-February that, instead of BTC breaching new highs, the top crypto was dragged lower until its eventual crash last month.

"Getting flashbacks to when we topped out in mid February. This PA literally looks exactly the same to me," TraderKoz tweeted.

The price action on TraderKoz's chart utilizes fractals in recognizing the familiar bearish pattern on the daily chart. It shows how the price bounced, consolidated, dropped, retreated, and then was followed by the massive selloff.

But unlike the pattern's last occurrence, the expected fall is not as severe and is estimated to come about days before May, which is the month when the BTC network will mine another 210,000 blocks and cut the block rewards conferred to miners by half.

The "halving" is believed to be a bullish event for the top crypto, and plenty of Bitcoin bulls are expecting it to salvage BTC from its current depressed levels -- and possibly elevate it to prices beyond its $20,000 all-time high.

In the past two halvings, Bitcoin did rally after triggering the supply reduction protocol, but it's all a matter of when. The price rally didn't materialize until months after the halving, and that is in stark contrast to what some traders believe when the price surge will happen.

The hype surrounding the upcoming halving is hitting all-time highs and is evidenced by the number of users who searched for the term on Google last month. Google Trends data show that interest over the term "Bitcoin halving" is tipping 100, which is the highest score for a term for a given region and period.

This alone could be indicative of plenty of Bitcoin fans hoping that the spike in prices will go down as soon as block 630,000 is hit, but that remains to be seen as the world's appetite for risk has somewhat been toned down due to economic downturn caused by COVID-19.

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