Is another Black Swan brewery happening?

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In March 2020, those taking a stand before Bitcoin’s halving were blinded by the Black Thursday market liquidation, sparked by panic at the start of the COVID pandemic and the lockdowns that followed.

With the new Omicron strain hitting the headlines and considering lockdowns again, could the cryptocurrency market face yet another dangerous macro storm and catastrophic meltdown?

Omicron and the return of the trendy Black Swan line

According to Wikipedia, a black swan is “an event that surprises, has a major effect, and is often inappropriately rationalized after the fact in hindsight.”

Black Thursday in March 2020 ranks perfectly as such. COVID arrived, the market panicked, and Bitcoin slumped to $ 3,800 at an all-time low. It turned out to be a huge overreaction.

Related reading | Want to learn technical analysis? Read the NewsBTC trading course

Despite the ‘surprise’ factor of the event and the fact that no one saw COVID coming, technical analysis proves that these black swan events can be predicted to some extent. But what if two black swan events occur touching the same trendline. Would they really be considered black swan events?

This is exactly what is at risk, given the recent news on the Omicron strain and the associated panic, and the fact that the price of Bitcoin is indeed up from the very trendline that was used. to predict the eventual target of Black Thursday against the dollar.

Could another black swan arrive with this trendy line? | Source: BTCUSD on TradingView.com Why Another Bitcoin Black Thursday Is Unlikely

The chart above shows that the price of Bitcoin has been rejected from the same trendline that prompted the COVID correction. The move was so abrupt and intense that a rally at the opposite poles resulted which took the cryptocurrency to over $ 65,000 per coin.

Selling Bitcoin just as harshly wouldn’t necessarily be a bad thing, as the rebound from such an event has shown. But despite the dangerous macro landscape and the sinking of the stock market, the conditions for the best cryptocurrency are very different this time around.

Conditions were very different then from today | Source: BTCUSD on TradingView.com

On the one hand, the arrows represent two releases of the old resistance in 2019, the second (marked in red) having failed to emerge from the Ichimoku cloud. This level of resistance dated back to the very beginning of the bear market, which is why the rejection of Black Thursday was particularly strong. Meanwhile, the current price action seems more to show that a resistance level is being reversed as support.

The blue path describes an expected driving wave of Elliott Wave, with three upward pulses and two corrective waves. According to Elliott Wave Theory, Wave 1 shows that there is still life left in an asset, but market participants are reluctant to believe that the bull market has started.

Related reading | In Search of Fibonacci: Is Bitcoin Starting A “Gold” Recovery?

Due to the remaining bearish sentiment, Wave 2 erases most of the advance from Wave 1, before Wave 3 begins. With the lows of Wave 1 retested at the peak of Wave 2, market participants are more confident in a flourishing uptrend, which is why wave 3 tends to be the longest and strongest. EWT calls this a wave “extension”.

Wave 4 cannot get into the path of Wave 1 and tends to move sideways. This suggests that there is unlikely to be another abrupt correction like what happened on Black Thursday in 2020. Any time Wave 4 officially ends, and whether or not it has made the subject to debate, targets of $ 100,000 per coin remain likely for peak wave. 5.

This is the painting that I have been following for months now. Until this coin collapses, I cannot be bearish on #Bitcoin. The bull market is still active. But has wave 5 started or not? pic.twitter.com/m04xxz8Kax

– Tony “The Bull” Spilotro (@tonyspilotroBTC) December 2, 2021

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market information and technical analysis training. Note: The content is educational and should not be taken as investment advice.

Featured image from iStockPhoto, charts from TradingView.com

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