Two weeks after making an all-time high at just under $74,000, bitcoin is irresistibly climbing back to this level again. Once this price is achieved, and bitcoin is able to hold above, some rapid price expansion might take place.
A supply shock like no other
The current supply of bitcoin from the network is set at around 900 BTC daily. With the buying of just the Blackrock and Fidelity Bitcoin ETFs accounting for more than this on many days, and the supply set to reduce by half in April, the scene is set for a supply shock like no other.
Bull flag breakout
Source: Coingecko/Trading View
In the very short time frame of the hourly, $BTC has broken out of its bull flag. A measured move for the flag could take the price to $76,000 and a new high.
Inverse head and shoulders pattern
Source: Coingecko/Trading View
Zooming out a little further into the 4-hour time frame, it can be seen that bitcoin is also playing out an inverse head and shoulders pattern. The measured move for this is $74,400. So both patterns take the price above the previous all-time high.
So it looks like the scene is set and the die is cast. Of course, we are talking about markets here, so nothing is set in stone – there are never certainties in the markets – just probabilities.
With that in mind, it is good to make some conjectures about the price of bitcoin over the next weeks and months. There is correlation between bitcoin and the stock markets, in that when stock markets go up – bitcoin goes up. The opposite also probably holds true.
Stock markets in line with bitcoin
Source: Coingecko/Trading View
For example, the Nasdaq 100 Index is presently heading skywards, seemingly with no concerns. Given that the index is in price discovery, price targets are perhaps best found by using fibonacci extensions. The 1.618 fibonacci is at 20553, which still leaves room for more price expansion from here. The S&P 500 is also in a similar position.
For bitcoin, the next move is possibly a more intense version of upward price momentum than what has been experienced so far. That said, corrections are like potholes in the road to be travelled. They can cause some damage, but if you stay in the car, you are hopefully going to arrive at your destination.
For bitcoin, this future is still uncertain. Conservative estimates are at around $100,000. This can be arrived at by using the fibonacci sequence, in the same manner as for the Nasdaq. Trade carefully.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
