The Bitcoin (BTC), price, has been in a hold pattern for the last two weeks. It continued to be underperformed by American stocks which enjoyed their best performance in nine months.
Bitcoin is stuck in a range between $57,000, the level of support, and $62,000, the point of resistance. Meanwhile, the Dow Jones 100, Nasdaq, and S&P 500 are just a few points away from their record highs.
As always, investors are predicting that Bitcoin will stage another strong bullish breakout, similar to what we witnessed after the strong rally of 2021. A closer look at its charts shows the exact opposite.
Bitcoin Monthly Chart Analysis
On the monthly chart we can see three things. The bulls still have control despite recent volatility. Bitcoin is above both the 25-week and 50-week exponential moving averages.
The death cross on the daily chart is invalidated by this view. This cross occurred as both the SMA 50 and SMA 200 indicators crossed in a downward direction.
The SMA indicator is good, but it does have some drawbacks because it treats all periods the same. The EMA indicator eliminates noise and lag, by focusing only on recent periods.
Another important point is that Bitcoin has begun to form a Hammer Candlestick Pattern. The weekly chart has formed one and it is now happening monthly.
A hammer pattern candlestick is composed of a large lower shadow, and a smaller body. This pattern can have an upper shadow in some cases, but not always. Hammer is among the bullishest signs on the market.
Bitcoin also formed a pattern of descending channels, which is significant for two reasons. This pattern is similar to a falling wedge which is a popular bullish sign.
The Bitcoin handle and cup pattern
This pullback pattern is part of the handles section in the cup-and-handle pattern.
Look back. Bitcoin climbed to a high record of $68,838 by 2021, but then retreated. It bottomed out at just $15,433 after FTX collapsed in 2022. Then, it bounced back and rose seven months in a row between September of last year and the month of March.
Bitcoin finished the cup portion of the pattern for the handle and cup during that bounce. The current pullback, therefore, is part of the cup section. There is therefore a high probability that Bitcoin will eventually bounce back to reach a new record.
On the monthly chart, Relative Strength Index has formed a cup-and-handle pattern.
Not only that. Bitcoin’s monthly chart shows what appears to be a perfectly Elliot impulse wave pattern. The first phase occurred in 2023, while the second took place from May to September of last year.
The fourth wave is the third, and it is usually the bullish one. It took place from September to March. There is therefore a high probability that the coin is about to enter the fifth, and often very bullish, wave.
All these patterns are not instantaneous. They take time. Even for the most basic of chart patterns, like the Hammer, Bitcoin must end each month within this range in order for the pattern to be successful. You will notice that the cup-and handle chart pattern in gold took many years to develop.
The Bitcoin price is similar to that of gold
The cup-and-handle chart pattern has worked perfectly in the past. The chart shows that the price of gold reached a high of 1,922 dollars in 2011, and then fell to $1,050 by 2015.
The gold price then recovered and tested that level again in 2020. Then, between November 2018 and July 2020 it consolidated and broke. In that time period, the Relative Strength Index formed a similar cup-and-handle pattern. The price of gold has reached a new record-breaking high.
In the coming years, there will be various catalysts that could affect the Bitcoin’s price. Donald Trump is trying to reduce the independence of the Federal Reserve, which would cause a steep decline in the US dollar. This is what happened with the Turkish Lira. Bitcoin is a good investment when the US dollar falls.
The Federal Reserve will start cutting rates at its next meeting, which is scheduled for September. This comes after the rate of unemployment has reached a new record. Bitcoin, and other assets flourished in an environment of low interest rates in 2021.
There are also signs that the institutions have been buying gold. Goldman Sachs bought Bitcoin ETFs valued at millions of dollars. It is the same with Susquehanna Management and Millenium Management.
The post Bitcoin Price Chart Should cheer up all BTC Bulls can be updated as new information unfolds.
