Bitcoin ($BTC) consolidates at $75,000 – what next?

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As an analyst with over two decades of market experience under my belt, I can confidently say that the current Bitcoin landscape is reminiscent of a gold rush – only this time, it’s digital gold we’re talking about. With the new Trump administration taking office and promising to support Bitcoin in various ways, we might just be on the cusp of a bull market that could last well into the end of 2021 and beyond.

Amidst a temporary market pause, Bitcoin‘s price is holding steady near the $75,000 mark. As a pro-Bitcoin policy shift is anticipated from the incoming Trump administration starting January, there’s speculation that Bitcoin could experience a significant rise as we approach the end of the year.

Everything changes for Bitcoin

The outcome of an election day significantly transformed the landscape for Bitcoin. Shortly after the polls closed in the U.S. election, the potential future for Bitcoin noticeably brightened. The victory of Trump has alleviated Bitcoin and cryptocurrency from the dangers that a hostile U.S. administration might have imposed, offering this innovative technology an opportunity to revolutionize finance.

Regarding regulations, the situation seems quite favorable. Trump has pledged to dismiss the widely disliked SEC chairman, Gary Gensler, on his inauguration day. Furthermore, other actions are anticipated which could effectively consign Operation Chokepoint 2.0 to the dustbin of history.

Further, Senator Cynthia Lummis, known for her pro-crypto stance, has declared plans to draft legislation that would mandate the U.S. administration to begin accumulating a strategic Bitcoin reserve. If this legislation passes, it could solidify the U.S. government’s backing of Bitcoin. This move might even trigger a competitive game among nations, where countries may start acquiring Bitcoin to keep pace.

On Wednesday, U.S. Spot Bitcoin ETFs resumed purchasing, with approximately $9K worth of Bitcoin being acquired across these funds. Given that Bitcoin has broken free from its bullish consolidation pattern (bull flag) and is now in a price exploration phase, it’s reasonable to expect the ETF funds to persist in their substantial buying spree.

Retracement, or continuance of upside momentum?

In simpler terms, over the past 4 hours, Bitcoin (BTC) has reached the peak of its upward trend within an ascending channel. It’s possible that we might see a brief dip or pullback from this point. If we examine the Fibonacci retracement levels, there’s a chance that this potential reversal could extend as low as the 0.786 Fibonacci level. This drop would be reasonable, considering it aligns with the top of the 2021 bull market. It also makes sense because after testing this level, Bitcoin might confirm a lower high and then resume its upward trajectory again.

On Wednesday, the Bitcoin price surged over $7,000, moving significantly away from the peak of the bull flag. Given the current momentum, it’s likely that this price increase will continue or at least be followed by a less steep consolidation before another upward movement occurs. If the trend continues and the Bitcoin price manages to stay above the ascending channel, it would bolster optimism for future gains.

$BTC cup and handle pattern?

The overall trend for Bitcoin seems quite optimistic. Small advancements on a daily basis are collectively impacting the bigger picture. On a monthly scale, you can observe that the Bitcoin price is gradually pulling away from the upper limit of a bullish formation known as a “bull flag.

In simpler terms, the arrangement we’ve described might be interpreted as a “cup and handle chart pattern.” If this pattern unfolds as expected, the projected price movement could reach approximately $130,000 for Bitcoin. This potential move is significantly higher than the predicted movement of $102,000 associated with the bull flag’s pole.

Macro momentum indicators turning bullish

The driving force that might propel the Bitcoin price to those possible price points is likely to stem from the Stochastic Oscillator and the Relative Strength Indicator (RSI).

The Stochastic RSI indicators have risen again, rebounding from the 50.00 level, suggesting strong upward price movement. At the moment, the Relative Strength Index is getting close to a downward trendline that dates back to early 2021. If this trendline is broken, it would be a very optimistic sign for the market.

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2024-11-07 20:15