Bitcoin Could Surge By 35%
Hopium has seemingly started to return to the crypto market en-masse. Sure, Bitcoin (BTC) and other digital assets are trading sideways, but the sentiiment displayed by cryptocurrency investors is buoyant.
GalaxyBTC, a leading analyst and self-proclaimed “accumulation machine,” recently revealed why there’s a likelihood that BTC could easily break to $5,500 in the near future.
He drew attention to a study from Thomas Bulkowski, a leading stock market trader. Galaxy states that more than 60% of ascending triangle patterns that are experiencing declining volume break upward. Each of these breakouts yield an average rally of 35%.
As Bitcoin is currently undergoing this pattern to a tee, with there being a series of lower lows, a number of bearish tests, and slightly declining volumes, Galaxy explained that BTC could hit $5,500 from here.
In response to Galaxy’s simple analysis, commenters expressed optimism. Anton Pagi wrote that it looks as though Bitcoin has entered an “A&E bottom with a handle” pattern, setting a strong precedent that a long-term floor may be in.
It is important to point out, however, that the average pullback if an asset fails to break convincingly above an ascending triangle is 19%, meaning that $3,300 would be the low-end target.
$5,000 May Very Well Be On The Table
Galaxy isn’t the first to have looked to $5,000 for BTC to breach in its next bullish breakout. In a number of recent tweets, pseudonymous British analyst Filb Filb has drawn attention to the aforementioned price point, citing a number of indicators that could push the cryptocurrency to that auspicious level.
As reported by Ethereum World News previously, the ratio between long and short positions on Bitfinex’s BTC market could be signalling an impending surge. Filb explained that when Bitfinex’s BTC long-short (L/S) ratio rose above 1.5, returned to one or below, and then moved back above 1.25 over the past year, the asset moved by higher by approximately 25% to 50%. On the other hand, when the L/S ratio failed to break 1.25 after a move under one, BTC entered “very bearish territory,” resulting in fresh lows for crypto.
Currently, the L/S ratio recently surpassed 1.5, collapsed to one, and could potentially rebound to or well past 1.25. And with that, the trader remarked that Bitcoin is “likely to break higher based on this metric alone,” drawing a hypothetical 25% rally, which would bring BTC up to $5,000, and potentially into a longer-term run.
In another bit of analysis, Filb touched on the 12-hour Moving Average Convergence Divergence, which has begun to trend positive above zero and the Chaikin Money Flow (CMF), which is marking growing levels of buy-side volume. He noted that this could help propel BTC higher in the coming months.
Photo by Dmitry Moraine on Unsplash
