At the time of my January article , bitcoin was trading near $45k, and there were rumors circulating about the SEC finally approving an ETF. That became a reality the very next day. Let’s revisit the chart now. Our price target back then was $66.5k, which was near the former all-time highs. That has since been hit, but in classic crypto fashion, BTC first fell back to $38.5k by the end of January before bottoming. Despite the wild ride from a performance and volatility perspective, over the last six months, BTC has continued to do one thing very well – adhere to the technicals. It never violated the breakout zone from October’23 and hit the target by early March. What about now? As we know, BTC has been flirting with the $70k since first hitting it in March. While seeing it stall since then may have been frustrating for crypto aficionados, even BTC needs to catch its breath at times. And by doing that over the last three months, it’s now formed FOUR different bullish patterns. This, of course, is why it has our attention now. Bullish Falling Wedge Pattern So, far only two of the four officially have been triggered. One of them is this falling wedge pattern. This may not sound bullish, but it simply describes a retracement formation that takes place within a larger trend. BTC has successfully broken out from this kind of chart formation three prior times over the last 12 months. The measured move target from the recent breakout is near 79,000. A key component of BTC actually achieving this target will be seeing momentum strengthen. This is gauged by its 14-day RSI indicator in blue. Each prior falling wedge pattern breakout was accompanied by its RSI moving to overbought territory. This doesn’t have to happen right away, but it’s a necessary component for this up move to eventually pull BTC to new highs and beyond. Two Bullish Patterns on One Chart The second and third bullish formations appear on this chart. We thought it was worth displaying them together given that one sits inside the other. The green formation is a cup & handle pattern; the one in blue is an inverse Head & Shoulders pattern. The upside objectives are $78,000 and $86,400, respectively. To reiterate, these targets are attained simply by adding the height of each pattern to the breakout points. As of right now, only the smaller cup and handle pattern is live; the bigger one is not, but additional follow through soon would trigger it, as well. The Big One Lastly, using all of the price action from early 2021 through now, we get this huge potential inverse H & S pattern. As is clear, the last three months of consolidation have produced the would-be right shoulder. We’d need a convincing breakout to new highs for this to become live. And that means we’d need to see the reviewed smaller formations continue to work first. In other words, a lot needs to go right for this multi-year bullish set up to play out, but it’s worth monitoring, especially since past breakouts to new highs have ushered in even higher prices in BTC’s brief history. Let’s also remember that we’re not even a month removed from the last halving. Some of BTC’s best runs have come in the 12 months leading up to and the 12 months AFTER the halving dates. Bitcoin is volatile and is extremely young vs. the traditional asset classes. However, from what we’ve seen over the last decade, its patterns have tended to repeat. Given its strong correlation to the S & P 500, all investors need to pay attention to what does from here. -Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (Owns GBTC) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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