There is a saying in technical analysis: Markets love symmetry. If a market goes up a certain way, it can go down in the same fashion. So, if a market went straight up or was parabolic on the way up, it could be parabolic or crash on the way back down.

This saying may be very relevant to what is presently happening in Bitcoin.

We looked at the price action surrounding Bitcoin’s melt-up in 2017. Between Nov. 24, 2017 and the start of the massive price spike on Dec. 6, 2017 there were four daily up moves of greater than 5%.

Those dates and percent moves are shown as follows:

Nov. 25, 2017: +6.5%
Nov. 26, 2017: +6.1%
Nov. 27, 2017: +5.2%
Dec. 1, 2017: + 7.3%

Recently, we have discovered this pattern has repeated itself with down moves. Between November 24 and December 3, there have been four daily down moves that were 5% or more. Those dates are shown as follows:

Nov. 24, 2018:  -11.2%
Nov. 25, 2018:  -5.76%
Nov. 30, 2018:  -6.10%
Dec. 3, 2018:    -5.92%

In short, we believe Bitcoin is doing what it did last year, only in reverse. The four down moves of greater than 5% may indicate that a mirror reaction of the Dec. 6 – Dec. 7 melt up is coming. As a reminder, that up move saw Bitcoin move from $12,000 to a high of over $20,000. Said plainly, we are concerned that  Bitcoin may endure a two day crash and lose another 30% of its value.

Bottom Line:

Based on this data, there is concern that Bitcoin could suffer one or two really big down days in mid-December.

Data Sources: | Data as of 12/4/2018 | Past performance not indicative of future returns.