Signals of a Bitcoin Price Rebound? A Rare Pattern Emerges
This week, Bitcoin (BTC) prices experienced continuous downward pressure, primarily due to concerns over tariffs between the United States and major trading partners. However, technical analysis has revealed two rare patterns, raising the possibility of a future rebound.
[Current State of the Bitcoin Market]
Bitcoin displayed volatility throughout the week, with the crypto fear and greed index dropping to 35, entering the "fear" zone. This decline stems from increasing anxiety about a trade war following the U.S.'s imposition of tariffs on Chinese goods. Currently, tariffs on Canada and Mexico have been put on hold, but there is a possibility they may resume next month.
Due to this uncertainty, investors are taking a wait-and-see approach, and inflows to Bitcoin ETFs have decreased from a peak of $68 billion this year to $57 billion. Furthermore, according to CoinGlass data, open interest in Bitcoin futures is also showing weakness.
[Fed's Interest Rate Policy and Bitcoin Prices]
The U.S. Federal Reserve’s first monetary policy meeting maintained a hawkish tone, affecting Bitcoin prices. The Fed has kept interest rates unchanged while indicating that only two rate cuts are anticipated this year. Generally, the Fed's accommodative (dovish) policies have a positive impact on the Bitcoin and altcoin markets, but that is not the case currently.
[Technical Analysis: Possibility of Bitcoin Price Increase]
Looking at Bitcoin’s weekly chart, two rare patterns have emerged. The first is the Cup & Handle pattern, which has formed from November 2021 to November 2023. This pattern is characterized by a gentle curve where prices fall and then rise again, serving as a strong bullish signal. Based on this pattern, Bitcoin's price could potentially rise to as high as $123,000.
The second pattern is the Bullish Flag pattern. This pattern typically occurs after a sharp rise, followed by a brief correction before again rallying. The size of the flag is approximately 55%, and based on this pattern, Bitcoin’s target price could be set at $166,000.
However, it may take a significant amount of time for these technical patterns to play out. For example, the Cup & Handle pattern took about three years to reach completion, suggesting that additional time may be needed to reach $166,000.
[Conclusion]
Currently, Bitcoin is exhibiting volatility due to short-term uncertainty and the hawkish Fed policy, but a bullish pattern is forming in the long term. If the technical analysis holds true, Bitcoin has the potential to reach a new all-time high within the next few years. Nonetheless, given the high market volatility, a cautious investment strategy is essential.
This article does not constitute investment advice or financial recommendations. Cryptocurrency investments carry high risks, and the responsibility for any investment decisions lies solely with the investor.
