BTC consolidates beneath last resistance level until $58,000
Bitcoin has exhibited impressive gains this week of 7.59% or $3,660. However, that uptick is around half of the prior week, that fact and some other technical indicators point to a possible bull trap. On the other hand, we are consolidating right beneath current resistance at around $52,000 and Bitcoin has yet to retrace after such tremendous gains of recent, points to an exuberant bullish rally.
How did last Friday’s pattern play out?
In our article last week, we discussed the bullish candlestick pattern called “three white soldiers” and how it strongly suggested a further increase in Bitcoin’s price. We have seen this pattern induce a Fibonacci extension of 100%, 1.618%, or 2.618% when found inside of Bitcoin’s daily charts.
In the previous instance of this pattern on Bitcoin’s daily timeframe occurred between December 1st through 3rd. On those three days, Bitcoin cracked $40,000 for the first time in 18 months. Only two days after forming the “three white soldiers” pattern, Bitcoin hit a high above $44,000. That equated to a move of nearly 18% in only five days. The increase of 17.91% ($6,759) equaled about a 1.618% extension of the three-candlestick pattern itself. Even more bullish was the fact that BTC gained the same amount in the following day’s confirming candle as it did in the three days that made up the pattern.
It is very noteworthy that last week’s occurrence had the exact same outcome. In last Friday’s own confirming candle, we hit a high above a 100% extension. Three days later it surpassed a 1.618% Fib. extension and for the last three days closed right beneath the 2.618% Fib. extension at $52,218.
How high can Bitcoin go during this rally?
FOMO alone would cause most people to mortgage their homes to buy as much BTC as possible right now. The next level of resistance should Bitcoin move decisively above $52,200 is not until around $58,500. That is a huge potential move if a further breakout ensues.
While the weekly charts, especially in Japanese Average format, look exceedingly bullish. If we look at a daily Japanese Average chart, we see that body size has been consistently diminishing over the past few days and even without any lower wicks hinting at a reversal from bullish to bearish, the strength of the uptrend is obviously weakening.
Bitcoin is at a fork in the road leading higher
I see two likely scenarios in the coming weeks.
The first is that Bitcoin plows ahead and reaches $58,000 next week on based on ETF inflow euphoria. From there it would likely have a substantial correction possibly to $44k or $40k before the halving narrative began the real 2024 bull run. This would mean that some holders would have unrealized losses possibly causing them to sell at a break even point slowing the upside surge.
The second scenario is that Bitcoin consolidates above $50,000 in a narrow range for the next few weeks. If this happens, BTC could possibly avoid a strong correction entirely. Bitcoin would go into the 2024 bull run with all holders in profits already, this would likely cause the bull run to be a true parabolic form.
Both scenarios are immensely bullish and call for a new all-time high by the end of 2025. They only differ in the short-term detours that Bitcoin may encounter on the way there.
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