Bitcoin bulls should prepare for another rally-like upward move, according to an independent analyst.
The pseudonymous user tweeted on Monday that BTC / USD is being traded within what appears to be a bullish continuation structure. The pattern known as the “bull pennant” forms when an asset enters a phase of consolidation after a sharp move higher. The sideways trend gives bulls enough time to prepare their upward strategy.
Eventually, the price breaks out of the pennant’s range – by as much as it did in the previous upward move known as the „flagpole“. The chart below shows the flagpole with the LH trend line. It’s about $ 3,245 long.
Bitcoin price fluctuates within a bull-pennant structure. Source: BTCUSD on TradingView.com
Hence, the BTC / USD pennant target is about $ 3,245 above the breakout level. That puts the pairing at around $ 22,000-22,500 in the coming daily sessions.
„Bitcoin [looks] pretty bullish,“ said the analyst. “Somehow, [with the] bullish pennant on 4 hours, [the next 24-48 hours may bring us a new [all time high]. Extreme volatility is expected, so do not use high leverage. “
Not all are so confident
The bullish analogy is in contrast to several bearish theories based on Bitcoin’s on-chain data .
Ki-Young Ju, head of the data analysis platform CryptoQuant, has published a series of charts showing whales in a sell-out mood. The portal’s proprietary metric „Whale Ratio on Spot Exchanges“ indicated a short-term downward trend.
„Historically,“ Ju writes, „if this indicator rises above 95%, which means that 95% of deposits come from the top 10 deposits, the market is likely to be bearish or move sideways.“
However, some argue that the metric cannot map the nature of the whales. 2020 saw an influx of many institutional players accumulating bitcoin to protect their portfolios from inflation.
With its fixed upper limit of 21 million coins, the cryptocurrency seemed to act as a hedge against a weakening US dollar.
“You have to distinguish old whales from new whales,” writes a user on Twitter, referring to the Nasdaq listed company MicroStrategy, which bought BTC in three rounds for a total of 475 million US dollars.
“MicroStrategy is one of those new whales that is eating up all available supplies of the old whales. The composition of the market participants is changing. We’re breaking $ 30,000 before 2021. “
Many see the US Federal Reserve’s quantitative easing and low interest rate policy as one of the biggest upside drivers in the cryptocurrency market.
„The FOMO among large investors could support the polarizing rally of Bitcoin,“ explains Holger Zschäpitz, a financial correspondent based in Germany. “Digital assets attract institutions like asset managers. More and more strategists are reporting on Bitcoin to arouse customer interest. „