Cryptocurrency enthusiasts were ecstatic when the crashing prices of BTC and other cryptos corrected back upwards. Each cryptocurrency reached its strong support level and reversed on its uptrend. For Bitcoin, the same thing happened. After Bitcoin prices hit a low of 28K, they skyrocketed back to reach their previous ATH of USD 64K. Prices also reached a new all-time high price of around USD 68K before adjusting back to the strong psychological level of USD 60K. Today, it seems like prices are consolidating before booming again. Will Bitcoin price manage to reach a new milestone soon? Here’s a quick technical analysis of Bitcoin prices.
Bitcoin Prices are Currently Consolidating – Good or Bad?
If we look closely at Bitcoin’s technical formation, we can clearly notice a repeating pattern. Prices tend to increase, reach a certain milestone, retrace around 38.2% or 50%, then continue higher. This is clearly visible in figure 1, where the technical formation of Bitcoin shows an A B C D formation. Currently, we are at the D stage of the pattern, which kinds of signals a short-term sell signal. This setup already happened, and prices did in fact retrace all the way towards the USD 56K level. For now (post D), prices are consolidating.
Whenever prices are consolidating, this usually means two things:
- Prices are getting stronger and are ready for another boom
- Prices are getting weaker in anticipation of a lower price
For the current state of Bitcoin, the former makes more sense. Most fundamental news in the crypto market is showing a strong market, higher price valuations, more advancements in the blockchain space and more investors are getting excited.
Bitcoin Price Prediction – Can Bitcoin reach 70K before 2022?
In order to better assess whether Bitcoin can indeed increase in valuation, we need to take into account 2 things:
- The current market condition
- The past price-action behavior of cryptos around this time of the year
As stated earlier, the current fundamentals of the crypto market are looking strong, with many developments and deployments on the way. On the other hand, the technical formation, although consolidating, can potentially represent a good buying trade setup for Bitcoin specifically. Traders can buy around the USD 60K level and place a stop-loss below 59K.
Now looking at how the crypto market behaved in the past towards the end of the year, here’s a chart showing what specifically happened. It looks like prices soared in December, then adjusted heavily in the next year. So to sum up, Bitcoin can definitely reach 70K if not higher even. The question remains, will the adjustment lower be strong?
Remember: Past price behaviors are not definite indications of future price actions. This is just a way to see what might happen.
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* This article was originally published here