The cryptocurrency economy has shed a lot of value during the
last six months dropping 48.70% from $3.08 trillion to today’s $1.58
trillion. While crypto markets looks extremely bearish these days, a few
crypto advocates have theorized the bear market will be less harsh this
time around. Furthermore, there’s also the rare scenario that bitcoin’s
price could reverse and see a triple top even though it’s commonly said
in the finance world “there is no such thing as a triple top.”
The Chances of Bitcoin Experiencing a Triple Top Scenario Is Rare, But Could Happen
Five days ago, Bitcoin.com News reported on a theory that describes bitcoin (BTC) prices experiencing a softer bear market than the leading crypto asset’s 80%+ declines recorded in the past. The reasoning behind the theory is because of past bitcoin price peaks and the most recent peaks recorded in May and November 2021.
While BTC
hit $64K in May and $69K in November, the two peaks were much smaller
than previous bull run gains. From the looks of things it seems, BTC’s
price experienced what’s called a double top. Now, coinciding with the
theory the current market downturn will be a softer bear run, there’s
also the rare possibility of a triple top scenario.
Basically, if a triple top scenario takes place, BTC’s fiat value will tap the same resistance it touched during the past downturn. For instance, after BTC
tapped a high of $64K in mid-May 2021, the value dropped to a low of
$31K on June 21, 2021. From there, the price once again skyrocketed and
reached $69K on November 10, 2021.
is to experience a triple top formation, then after hitting resistance
the price should reverse back to the highs seen in May and November
2021.
If a triple-top happens to occur, then the upcoming bottom would be
somewhat in the range of the $31K mark, when it starts another reversal.
In order for this to happen, BTC
will have to see a complete reversal from the same resistance levels
and the third top could be equal to and just above or just below the
$69K region.
Reversal Theories Considered ‘Hopium’ as Many Won’t Bet on Such a Risky Play
Of course, many will assume theories of a triple top are based on pure faith and “hopium.”
In the trading world, triple tops are very rare and quad tops are
seemingly non-existent. In 2019, allstarcharts.com analyst JC says:
“We rarely see triple tops, and I can’t even tell you if I’ve ever seen
a quadruple top. Betting on these outcomes seems to never pay.”
Which means betting on bitcoin (BTC)
experiencing a triple top is a very risky bet in comparison to betting
on a double top formation. Moreover, its a common message in the trading
world to state:
There is no such thing as a triple top.
While it’s common to say the statement, saying “there is no such
thing as a triple top,” the comment is not entirely accurate. They
surely have occurred in financial market scenarios in the past, and
traders who risked betting on them have reaped the rewards. However,
when a triple top does execute and complete, the “party is officially
over.” When a triple top is executed, the price will begin a bearish
descent until the next price cycle regains bullish strength.
While many are likely still willing to bet on a triple top formation
as far as bitcoin’s price is concerned, its even more likely they are
not willing to bet on a seemingly non-existent quad top. Moreover,
triple tops being as rare as they are, means a great deal of traders are
not willing to bet a third peak is in the cards. The chance of a BTC triple top coming to fruition is not impossible, and no one can safely say the scenario will not come into play.
source link : https://news.bitcoin.com/as-btc-slides-toward-resistance-the-chance-of-a-rare-triple-top-formation-comes-into-play/
