Over recent days, Bitcoin (BTC) has stagnated. After crashing to $4,950 late last week, BTC has steadily ground higher, trading between $5,150 and $5,300 for the past 72 hours without as much as a hitch. And interestingly, some traders have deemed this indecision bearish, as trading activity across the crypto-board has begun to decline.
In fact, one analyst, going by “Magic Poop Cannon” on Twitter, remarked that the lack of strong activity “painted half of an enormous evening star Doji pattern.” For those who missed the memo, an evening star is a reversal pattern, in which there is a large uptrend (seen last week), stagnation (this week), and reversal. A Doji candle is one in which its opening and closing price are effectively the same, signaling indecision in a market. If this “evening star Doji” pattern plays out as Magic expects, Bitcoin could see a 15% to 20% drop to $4,100 in the coming ten days, and then sell-off even further, potentially to the mid $3,000s, to finish this formation.