Jacob Canfield, a respected entrepreneur and Bitcoin advocate, has spotted a rather interesting pattern on the Bitcoin chart. Per his observations, the apex cryptocurrency typically hits a certain point before bears take over the market and begin to stage a selloff.
In a detailed post shared to X, formerly Twitter, the Bitcoin trader shared his remarkable findings with his 98,000+ followers.
During bullish rallies, he first observed Bitcoin’s connection to the 61.8% Fibonacci retracement level. The Bitcoin asset seems to repeatedly get to the aforementioned retracement level right before a sell-off. Immediately after, Bitcoin’s value hits higher price levels.
The market participant highlighted several scenarios where his observations had played out exactly as he stated. One of the first occasions dates back to the 2024 – 2016 period. As depicted in the chart shared by Canfield, a 38% sell-off was recorded before a new high was attained.
In 2019, right before the pandemic began, the bear market hit the .618 Fibonacci retracement level perfectly, from as far back as 2017 to 2018 (high to low).
Connecting with previous events to Bitcoin’s present market, the analyst said the following;
“I don’t think we see big pullbacks (more than 15-20% on Bitcoin until we make it up there, but I could always be wrong and will happily change my plan until then. Then maybe a quick wick down to $32,000-$36,000 on some FUD like US banning bitcoin mining or ETF delay or US banning owning Bitcoin.”
Should a bear market rally ensue, Bitcoin is well positioned to sweep past the $48,700 price level at the .618 Fibonacci retracement level, he added. On the other hand, if a bull rally is underway, he maintains that the .618 is the best level to start hedging for a bit of sell-off to reload. He backs his position by pointing to historical data and how it has consistently shown itself to be a strong position.
“If we break and close above it (the .618), then I think new highs are most likely, and I have my target in mind for that, but I can share that at some other time. Especially with the current market environment of inflation, money printing, and the spot ETF and halving narratives.” Canfield wrote.