Bitcoin Breakout Could Send it to $13,000… or $18,000
Again, Bitcoin (BTC) volatility has dropped through the floor, with the cryptocurrency finding itself trading within $10,500 to $11,000 for over a day now. While some suggest that the lack of positive price action is a sign of an impending secondary drop, during which some analysts expect Bitcoin to fall under $9,000 and maybe even $8,000, BTC may just be preparing to break out.
Per a chart from Nunya Bizniz, Bitcoin’s four-hour candles are currently trading in a bull flag, which is marked by a downward sloping channel after a strong uptrend.
Should Bitcoin break out from the top line of the current bull flag, which is currently situated at $12,300, Bizniz suggests that a 25% gain is likely — implying an appreciation to $15,000 if such a move higher occurs in the near future. The 25% gain figure was presumably derived from studies.
$15,000 is just a low-end estimate. As Bizniz goes on to point out, the bull flag that Bitcoin is currently situated in could be defined as a “High & Tight” bull flag, a special iteration of the pattern that normally marks a short-term pit stop in an uptrend. Because, according to Bizniz’s definition of a High & Tight, they occur after a 90% rise, which is just what BTC experienced when it rallied from $7,500 to $14,000.
Breakouts from this form of a bull flag result in an average 70% gain, implying a rally to $18,000 and beyond.
BTC Drops, as do Alts
But said breakout might not occur. In the past hour, Bitcoin has dropped by $300 to $10,200, while altcoins have shed even more than the market leader.
Also, as this Ichimoku Cloud-centric analyst recently pointed out, Bitcoin’s one-day chart is looking all too good. He notes that the Heikin Ashi candle trend is weakening, as marked by small candles after large downtrend candles. Other Ichikmoku Cloud indicators implying bearish price action includes the Chikou line being now below the price, the Tenkan and Kijun lines pointing lower, and the price entering the Kumo band. Per a later tweet from the trader, the move that follows could bring BTC into the $7,000 range.
This semi-target lines up with an analysis of the Mayer Multiple by CryptoKea, a little-known analyst that accurately called the recent drop to at least $9,700 earlier this month. He suggests that if Bitcoin is seeing history repeat, meaning that this ongoing rally turns out like 2016’s first bull rally, BTC could reverse to anywhere from $7,148 to $8,700. This corresponds to 1.20 times to 1.46 times of the 200-day moving average, which currently sits at $5,957.
Photo by Andrei Lasc on Unsplash