Up 45%: Is Bitcoin's Price Preparing for a Bull Market?

Bitcoin's price has rallied 45 percent in the last four weeks, setting the stage for a long-term bull market, according to technical charts.

AccessTimeIconJul 26, 2018 at 11:00 a.m. UTC
Updated Sep 13, 2021 at 8:13 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Bitcoin's (BTC) 45 percent month-on-month rally has likely put the leading cryptocurrency on the path to a long-term bull market, technical studies indicate.

As of writing, BTC is changing hands at $8,300 on Bitfinex, having clocked a two-month high of $8,507 on Tuesday.

A month ago, it was all gloom and doom in the bitcoin market, as the cryptocurrency had created back-to-back long-term bearish chart patterns in the months of May and June. Consequently, BTC looked primed for a move lower to $5,000.

However, the inverse head-and-shoulders breakout seen earlier this month confirmed a short-term bearish-to-bullish trend change. Furthermore, the convincing break above $8,000 seen this week appears to have set the stage for a major bull run.

Daily chart: Falling channel breakout

btcusd-daily-chart-5

To start with, the pennant breakdown witnessed on June 9 had signaled a revival of the sell-off from the record high of $20,000 reached in December 2017.

However, the ensuing sell-off ran out of steam at $5,755 (June 24 low) and the subsequent recovery established a falling channel (bearish pattern marked by circles), which has been breached to the higher side this week.

So, what we have is an upside break of the four-month-long falling channel, i.e. a long-term bearish-to-bullish trend change.

4-hour chart: Rising channel is intact

download-8-13

The short-term outlook also remains bullish as indicated by the rising channel (higher highs and higher lows). Still, there is merit in being cautious as the above chart also shows a bearish relative strength index (RSI) divergence, which could yield a price pullback.

View

  • BTC has likely witnessed a long-term bullish reversal this week.
  • In the short-term, BTC may struggle to find a firm foothold above the all-important 200-day moving average (MA) hurdle of $8,593, courtesy of overbought conditions.
  • BTC could revisit the 100-day MA support of $7,616 if the bearish RSI divergence seen in the 4-hour chart pushes prices below $7,938 (rising channel support).

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Charging bull image via Shutterstock; Charts by Trading View

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.