Bitcoin - Price Discovery Correction 2 Begins?
The grander scheme of the Bitcoin Cycle
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The Bitcoin Roadmap
Historically speaking, Bitcoin may be on the cusp of transitioning into Price Discovery Correction 2.
Price Discovery Uptrend 1 took seven weeks to local top out, which aligns perfectly with historical standards.
By historical precedent, we tend to see Price Discovery Uptrend 1 peak between weeks 6-8, so peaking in week 7 was bang on that historical range.
Price Discovery Uptrend 2 has followed a very similar timeframe in terms of weeks compared to PDU1.
Historically, we tend to see Price Discovery Uptrend 2 peak between weeks 5-7. Interestingly, the upside wick that formed last week developed right at the finish line in Week 6 before pulling back.
This upside wick was crucial because it came to save the historical cyclicality that we tend to see in price action across cycles.
Because the previous All-Time High formed in Week 2 of PDU2 and if it stayed that way, that could have been a gross invalidation of historical cyclicality at this phase in the cycle.
So the fact that we got this upside wick in week 6-6.5 is very positive because we're pretty much in alignment with historical price action.
We might be transitioning into a pullback period, but it's important to note that this pullback period might not last as long as previous corrections.
After all, at this same moment in the cycle Bitcoin performed a 3-week pullback that was -25% deep back in 2021 and a -29% pullback that lasted only 1 week in 2017.
In both cases, these pullbacks were shorter and shallower by standards of the previous corrections in the respective cycles.
Bitcoin is really well aligned with historical cycles and to keep things that way, price will need to ideally resolve this pullback over the next handful of weeks and perform a relatively shallow pullback of -15% to -25%.
Failed Bull Flag Retest - What Now?
Last week, we spoke about Bitcoin reclaiming the Bull Flag formation and positioning itself above the pattern, attempting to turn the Bull Flag top into new support to confirm the breakout.
The key question was: could BTC hold the $119k Bull Flag top as support?
We have our answer:
Bitcoin has failed the retest of the Bull Flag top:
The Bull Flag structure shows we've deviated below it, but importantly, before we deviated below it, we failed the retest of the Bull Flag top - not once, but twice.
And in that failure, BTC has developed a new Lower High at ~$114k:
In failing that Bull Flag top retest, we've developed that new Lower High which creates the foundation for a new potential technical pattern...