Could this pattern be a major buy signal for bitcoin and cryptos?

Here’s something that actually might be of good news to all Bitcoin investors and traders and actually to all crypto investors and traders in general.

Especially for those of you who are looking to perhaps hold Bitcoin for the long term.

So let me just explain to you what it is that I’m gonna share with you. You see in a previous video what I said to you was that if Bitcoin takes out and closes below this support level.

So here’s our support level and here’s why this is the February low and this is the April low and as you may remember in a previous video I said to you that if Bitcoin falls below this major an important support level this February April low which is about $6500 to $6000 level.

Okay if we fall below that level that essentially would be terrible for Bitcoin because that is breaking market structure and could lead to significantly lower levels, in other words significant sell-off in Bitcoin now having said that I want to show you in this video why there is an exception to that rule.

Let me explain you see yesterday I was looking at the chart of Bitcoin from 2013 to 2014 and here’s something important we can learn from bitcoins behavior from a few years ago you see back in 2013 which I’m sure many of you remember in that year especially in November from about October to December of 2013 as you may recall Bitcoin did something very similar to what it did last year which is it went up nearly a thousand percent.

Bitcoin sky rocketed from about a hundred and fifty dollars in October November of 2013 and it went up all the way to just above eleven hundred dollars so again about a thousand percent move now you’ll notice what happened next is very similar to what happened in December of last year in 2017 you see in December of 2013 Bitcoin had a very sudden drop or crash you want to call it that then a rally.

And then another drop okay and it continued to do this until it finally made this bottom in December of that year around about the $400 level and then staged a very strong rally.

Now I want to just mark that level there for you let me just so what I’m gonna do is I’m gonna grab a line and I’m gonna place a horizontal line right about that bottom there okay alright so there’s our low from December of 2013 and then after that rally which failed.

Notice it came back now it did have an intermediate drop below the level and then it went up again but notice what happened next in February of 2014 it came back and retested that level there it is and notice it held that level.

so in other words about a few years ago Bitcoin made a low or a bottom back in December of 2013 and then it retested that level in February 2014 forming a sort of double bottom pattern now look what happened next about a few months later in April of that year look what it did it broke below that significant level that’s in other words it’s breaking market structure here but notice what happened next it quickly recovered and went back above it again now is that significant yes and I’m gonna show you why it’s significant.

You see guys in technical analysis or chart analysis that is what’s called a false breakout and a false breakout is one of the most important and most significant chart patterns you’ll ever see in the markets and they happen more often than you might think remember guys a false breakout of a support level is by far one of the most important and most powerful by signals you’ll find in chart analysis in fact let me show you exactly what happened after that false breakout okay.

So let’s take a look at what happened next so just to put into context.

There’s our 2013 low the 2014 low draw a line across it okay like so and look what happened here you see there it is that’s the false breakout and essentially the market here is what we’re seeing here is a break of market structure.

Now it is true that breaking market structure is a terrible thing for that market because essentially you’re breaking key support levels which leads to significant sell offs however there is an exception to that rule.

The exception to that rule is when you see a false breakout and what you see here is a pure and perfect example of a false breakout because what is happening here and actually by the way guys a lot of this is happening due to algorithmic and BOTS activity.

It is important for you to remember that a lot of market activity today is not done necessarily by actual investors and traders (by human beings) but they’re done by algorithms and BOTS designed and created by institutions and big market players.

I personally think this is a pure example of it because what these algorithms and these BOTS do, they deliberately push the price down below this key support level and that is done why it’s done to manipulate a lot of the traders out there.

In fact, the classic textbook on chart analysis says to you that that’s actually a sell signal and these institutions have read the same textbooks that you’ve probably read so they know that’s what you’re thinking that when the price falls below the key support level or breaking market structure they know that what you’re probably thinking is okay you know what that is a sell signal and that of course drives a lot of people to start shorting that market.

All right unfortunately what happens next is the price quickly recovers and goes back above goes back above the key support level.

That guy’s is a very powerful buy signal a false breakout which is exactly what that is this is how you know it’s a false breakout when price falls below the key support level right there and then quickly recovers and goes back above it all right that is how you know it’s a false breakout that is how you know it’s a buy signal because you’re back above the support level and look what happen immediately afterwards.

Well immediately afterwards we had a rally pull back and then a continuation of that rally so what does that mean now it means this it means that if you take a look at Bitcoin chart right now let’s draw a line across the bottom here and here we go we’re gonna draw a line across that significant low that is the February April low which is about the 6500 to 6000 level there.

What it means is this if Bitcoin we’re to drop below that February April oh okay yes it is breaking market structure and yes it is bad but remember breaking of market structure is only bad if you stay below that level in order for that signal to be confirmed because if you quickly see a recovery and if price quick it bounces back above it again in other words if price breaks the February lows about $6500 if we quickly go back above it again like we just saw back on Bitcoin a few years ago that is actually a false breakout what that shows to you is that a lot of these bots and algorithms have deliberately pushed price below the February lows and that counts as a buy signal.