There are other ways to interpret this - if it breaks the support line - than we'll have a big correction. On a log chart this is a straight line - so many chartist will treat it as a trend line and support.
The history of other exponential fragments supports this. It is pretty silly to reject most of bitcoin history as 'outliers' - outliers are the exceptions, they cannot be the biggest part of the data.
this is exactly what is wrong with this kind of analysis and why i never liked it and most people call it psedu science anyways
everyone interprets them differently and when they come true everyone says it was a perfect speculation and when they don't come true everyone tries to come up with excuses and additional scenarios to make them work and again when those additional scenarios don't work they come up with more and change the lines again.
it is a broken chain based on a false base.
market doesn't move based on lines on a chart so that if one of them was broken, it goes further down just because an imaginary line was broken.
I know this is an old post, but I have not seen it before, so I just want to explain about trend lines.
Think of that imaginary line as a visual representation of the rate at which market participants become comfortable with a price change. The price spikes up, the market doesn't automatically accept that as the new floor. Instead, gradually building support beneath that spike in sort of a front running characteristic. Each buyer moving in front of the last, but still trying to get the best price they can. This is why trend lines work. Now, throw in multiple points of contact without failure and you begin to see a trend develop. Once that line is broken, it signals a failure of support for the continuation of that trend and a new base must be established. Simple violations are often ignored as "outliers", while closes and time spent below the line is evidence of that failure. Also, as the slope increases, this is where people are getting impatient waiting for the price to come back to the line and what creates new trends. These new trends, each steeper than the last, triggers a little more frantic behavior and FOMO is born as parabolic moves unfold.
The price definitely can go down further because the line is broken, but more of self fulfilling prophecy rather than the line itself since traders follow the lines. The line is just a representation of support. Once broken, odds are that price will continue down until people are confident buying again. It is exactly the same as moving averages or Bollinger Bands. Even indicators like RSI and MACD can have trend lines or levels that signal a change in the market dynamics.
Edit:
Consider this chart. The orange trend line is well established and has multiple points of contact (and a violation, but no close below at the ii). Then the parabolic move in blue. If the blue line breaks expect the price to fall near/to the orange line to find support. If the orange line breaks, there is a very good chance to have extended consolidation below the line as a new base is formed.
