At least for the time being, Bitcoin (BTC) has lost steam. Since peaking at just shy of $14,000 in late-June, the cryptocurrency has seen a 35% retracement, falling to as low as $9,100 earlier this week.

Related Reading: Bitcoin Volatility Surges Since February of 2019; Is Another Big Move Imminent?

With this strong correction, which comes shortly after many analysts were calling for Bitcoin to break $20,000 lickety-split, BTC has purportedly broken its parabolic trend. The trend, as depicted by many analysts, has held for over six months, making this break somewhat of a bearish sign.

In fact, as Peter Brandt, a legendary commodities trader, pointed out recently, a violation of the parabola could see BTC retrace by 80%, implying a price of $2,800 (actual 80% correction) or $5,000 (80% correction of rally), depending on how you analyze charts.

Per previous reports from NewsBTC, the Bitcoin maximalist who has famously claimed that more than 95% of altcoins are likely to fail stated:

“If current parabolic phase is violated, we could expect either an 80% correction of 7-month advance or much smaller correction w/ definition of new parabola w/ shallower slope. $BTC Note formation of possible 2-wk H&S or H&S failure” he explained in a recent tweet.”

While many have focused on the first scenario, which is obviously more eye-catching than the latter, historical trends suggest that Bitcoin is unlikely to hit $5,000, despite what bears may say.

Not the End of the World

No, Bitcoin breaking under its seven-month parabola is not the end of the world. Far from.

As Mohit Sorout, a partner at Bitazu Capital, recently pointed out, those calling for dramatic corrections due to the loss of the trend should not be paid attention to.

As Sorout notes, during the starts of previous bull runs, especially the one seen in 2016/2017, there were a handful of multi-month parabolas that broke on multiple corrections. The thing is, BTC then didn’t see an 80%+ correction, so why should it experience such a downturn now?

Pay ZERO attention to accounts calling doom over break of intermediate

i. parabolic advances and
ii. price channels.

One will break, a new one will form.

We’re in a #Bitcoin bull market, don’t get shaken out. #stacksats pic.twitter.com/Eu5ffYPDVd

— Mohit Sorout (@singhsoro) July 19, 2019

The investor goes on to point out through a chart that if history repeats itself, $9,100 could be the lowest that BTC will drop to, maybe forever, and that BTC may be on the verge of entering yet another parabola.

What’s more, Crypto Hamster recently pointed out that the one-day Relative Strength Index (RSI) and the Stochastic iteration of this indicator were at their lowest levels since at least February when BTC hit $9,500.

The one-day Moving Average Convergence Divergence (MACD) tapped the zero level, despite the fact that Bitcoin is in a raging bull market according to most analysis.

Also, the Elder’s Forse Index, an indicator meant to exhibit the strength of moves, was at its lowest since November 2018; and historical volatility was almost at 100%, implying a move to the upside to return volatility to levels deemed normal.

Related Reading: Bitcoin Suddenly Surges Past $10,000 as Bear Trend Dies; Factors & Trends

Most importantly, though, this retracement is par for the course. You see, if this is truly a bull market, a 30% to 40% correction every few months is entirely normal.

As CryptoSlate’s Thies reminds his followers, the rally seen in 2015 to 2017 saw BTC fall by 31% to 40% over five times, retracing to touch a key resistance-turned-support level, before continuing higher.

$BTC
Bull run in 2015-2017 included run-ups, typically followed by a retrace to touch the top of the prior high. These drops ranged from 31-40%, before rinsing/repeating onward.

Looks very similar to what we are seeing now. pic.twitter.com/vd5grw1bVC

— CryptoThies (@KingThies) July 18, 2019

What’s Next for Bitcoin? 

So, barring that BTC doesn’t collapse to sub-$5,000 levels, what exactly is next for the cryptocurrency?

According to most analysts, a strong rally to finish the year strong.

Per a recent CNBC interview with Fundstrat’s Tom Lee, Bitcoin will soon see fresh all-time highs. In that interview, Lee mentioned that BTC is likely to get boosted by Trump’s tweet on cryptocurrency, the discourse around Libra, and a growing number of issues with fiscal policy.

Further supporting his thesis, Lee stated on a Binance podcast that once $10,000 is breached, FOMO will result in a “fast and furious” move to $20,000, then a six-month appreciation to potentially $40,000.

This isn’t the only sign showing that $40,000 is possible. Per previous reports, Timothy Peterson laid out a model that suggested that since Bitcoin gained 180% year-to-date (effectively the 2019’s first half), it has another 250% to run. This implies a price of $40,000.

There are some detractors to this theory, however. Namely Dave the Wave notes that should BTC follow its logarithmic growth curve, the asset could return to the $6,000 range by the end of 2019.

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