And we have… a triple top! – BitcoinBlog.de – the blog for Bitcoin and other virtual currencies

Bitcoin price is ending the rally of the last few months with a rare pattern: a triple top. The pattern is so beautiful that even Andrej Kostolany liked it, even though he didn’t really believe in technical analysis.

A triple top is actually self-explanatory. It, explains Investopedia, “consists of three peaks and signals that an asset’s rally is over and lower prices are on the way.”

Like its less rare brother, the double top, the triple top is one of the “bearish” chart patterns, i.e. a signal for falling prices.

For a triple top to be valid, it must follow an uptrend. It then consists of three peaks at a similar height, usually a maximum of three percent apart. This is the resistance that is tested three times unsuccessfully in a triple top. After the third attempt, the price falls below the “swing lows”, i.e. the low points after the previous two peaks. When this is done, the triple top is complete.

The triple top materialized in Bitcoin in an exemplary manner: the price was on a rally that catapulted it from just under 40,000 to around 66,000 euros from February. The three tops were between 66,000 and 67,000 each. After the third top, the price fell below the swing lows, which were between 58,000 and 60,000 euros. A triple top couldn’t be much clearer.

The pattern, Investopedia continued, “shows that price is unable to penetrate the area around the top. It means that after several attempts, the asset is not able to find many buyers in this price range.” Once the market becomes clear that the price is unable to climb above the resistance, the only option is to hold a limited potential. Speculative investors sell off, technical traders who believe in patterns exit long positions and open shorts.

As is often the case, analyzing chart patterns is little more than reading coffee grounds or horoscopes. They do not represent natural laws, like scientific curves, but in the best case scenario trends of the swarm intelligence of the markets.

As stock market guru Andrej Kostolany said: Charts that are continued into the future are fiction. Anyone who allows themselves to be guided by patterns is committing “money murder”. Kostolany only gave real meaning to a few patterns, including the “M” in an upward movement:

“But if the chart shows the shape of an M a few times, then this means a ceiling, that is, a high price that can no longer be broken through. Because a larger quantity of the share will probably be offered for sale, and as long as this tap is not turned off, the price cannot rise.”

And that’s exactly the formation we have – a price that repeatedly bounces off a peak. There is apparently a threshold that the price is currently unwilling to exceed because someone turns on a tap and throws Bitcoins onto the market. Normally the market reacts on the second top, but this time it needed the third confirmation to change its expectation.

The situation is different with other cryptocurrencies, such as Ethereum or Solana.

Solana forms a clean double top with the last peak at the beginning of April at 187 euros, and has since then continuously and massively fallen, to now just 124 euros.

Ethereum, on the other hand, reached a single top at around 3,700 euros in March, then fell, formed a double top at around 3,400 euros – and has been collapsing ever since. At around 2,800 euros, Ethereum is currently at its lowest point since the rally picked up speed at the end of February.

So we have completed bearish price patterns for both Bitcoin and two of the largest other cryptocurrencies. To what extent these continue, i.e. fulfill what is attributed to them – that is of course pure speculation and poetry.