Bad news after bad news are screwing up bitcoin's iconic V-shaped BUST&BOOM pattern.

Bad news after bad news is screwing up bitcoin's iconic V-shaped BUST&BOOM pattern. SEC requiring all crypto exchanges to register, US Court's ruling recognizing bitcoin as a commodity (as opposed to IRS's ruling as a property), Japan's crackdown on exchanges and Binance hacking incident have dampened the enthusiasm that drives bitcoin's road to recovery.

Let's look at the possible scenarios. The first set of scenarios below assumes that negative news are things of the past (at least short-term) and positive news will dominate the next few weeks. The second set of scenarios is just the opposite.

Positive Outlook Scenarios

Scenario 1 - Bitcoin will stay loyal to its historic V-Shape Bust&Boom Pattern

This would be the most optimistic scenario for bitcoin which could happen if next week will be peppered with positive news. News on the first bitcoin ETF for example would be welcomed with great cheers. Positive news from the Binance team and the Japanese and Korean markets would be music to the ears.

Scenario 2 - V-Shape Bust&Boom Pattern will slant to 60 degrees (from 90 degrees)

If the effects of this week's negative news get carried forward to next week, investors will be cautious in putting their money on crypto resulting to a slower price march upwards. A symmetrical triangle will form as a result and price could break out on the upside when the effect dwindles.

Scenario 3 - Double Bottom Bust&Boom Pattern will form

This will be the first in bitcoin history to have double bottom BUST& BOOM Pattern. As a result, the V-Shape pattern will move by another 10 to 15 degrees to the right. A balance mix of positive and negative news could usher this scenario to frution.

Negative Outlook Scenarios (Short term & Long Term)

If more negative news surface next week, the more likely scenarios would be for bitcoin to test the previous $6,000 bottom.

Scenario 4 - Downward Break-Out from the Symmetrical Triangle

Similar to scenario 2 above, a symmetrical triangle could form over the next few days and price could further go down after breaking out from the triangle.

Scenario 5 - Downward Break-Out from the Double Bottom

Similar to scenario 4 above, more negative news to damper the sentiment of investors. The only difference is the quicker path to testing the previous bottom by avoiding the symmetrical triangle.

Conclusion:

Technical analysis (TA) has its limitations. Even proven and recurring patterns like the symmetrical triangle has a 30% accuracy rate only according to contemporary wisdom. Also, mixing TA and news is a very complex endeavor and many TA supporters would not recommend doing it. In this school of thought, it is believed that the price graph already incorporates all the factors that impact the price of a stock or crypto hence, looking at the news a separate and distinct event is like double counting the effect of such.

My personal view (gut feel) on the future and potential of bitcoin and altcoins remains positive. Blockchain technology is too good, too valuable and too disruptive to be a fad. I don't look at blockchain as "too advanced for its time" either like the Concord or Tesla's wireless electricity. How long will bitcoin be able to retake its previous ATH is to me the question that requires an answer. But if you are long on bitcoin and altcoins, it doesn't really matter which route it takes. It will still get to the destination at the appropriate time regardless.

Disclosure: This post does not intend to provide investment nor does it represents that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the article in the process of making a fully informed investment decision.

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