Bitcoin ‘Could Consolidate For ‘4 Or 5 Months’ But Big Cup And Handle Looks Promising – Analyst
According to Charles Edwards, founder of Capriole Investments, stock and crypto market seasonality, along with Bitcoin on-chain information, suggest that BTC prices may consolidate in 4 to 5 months.
In a new report, Edwards says bitcoin continues to oscillate in the cyclical range of $58,000-65,000, consistently closing above $58,000 each week as “sustained support for the long-term trend.”
He likens BTC's price action to that of gold, which has formed a “giant cup and holder” pattern over the past 13 years since the “cup” lasting four years, and explains how Bitcoin shows a similar chart pattern.
Given the similarities between Bitcoin and gold, Edwards said there's a chance that BTC could spend “up to 9 months in a range high before a cup to the upside.”
Edwards said.
As long as the price doesn't exceed $58,000, the technical figure will be ridiculous. The more we spend at high altitudes, the more likely this structure will merge into the classic ‘cup and handle' design, which typically indicates strong price appreciation.
Despite the promise of the cup and handle pattern, Edwards observed that Bitcoin's supply delta and 90-day Coin Days Destroyed (CDD) metrics have formed circular tops. Edwards explained that Capriol Investments uses each to identify cycle peaks and “we're at a comparable mid-cycle pit stop.”
Regardless, this chart is telling us to wait at least a few months (perhaps up to 6 months) before cutting sideways and trending. Today we are at our two month update.
Edwards also said he is closely monitoring the Capriole Bitcoin Macro Index, a combination of more than 50 of the most powerful Bitcoin on-chain and macro market indicators, which predicts BTC's “risk will continue to fall.”
Risk-off describes market sentiment in which investors reduce their exposure to risk and focus on preserving their capital.
However, the report noted that “most other metrics still suggest this cycle has some room to run.”
Related: Bitcoin Analysis Sees Next $74K As BTC Price Tries To Hold 7.5% Gain
Investment management firm ARK Invest confirmed Edwards' view, agreeing that bitcoin is still bullish. Analysts at ARK Invest have shown that past halving events have set long-term momentum for BTC.
The report notes that each halving is a “precondition for an upward trend over the long-term horizon.”
“A 3x Bitcoin price increase a year after this halving may be too optimistic. That said, this chart highlights the issue of Bitcoin's increasing scarcity over a meaningful time horizon.”
If the half-cycle goes as expected, the price of Bitcoin could enter a parabolic growth between the price range of $180,000 and $200,00 if the price of BTC rises 3X.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
