This Bitcoin price chart should cheer all of BTC bulls

The price of Bitcoin (BTC) has remained relatively stagnant over the past two weeks, underperforming compared to the soaring American equities market. While indices like the Dow Jones, Nasdaq 100, and S&P 500 are on the cusp of reaching all-time highs, BTC has been stuck in a narrow range between $57,000 and $62,000. Some investors may interpret this as a bearish signal, given the previous bearish breakout after Bitcoin’s strong rally in 2021. However, a closer examination of the coin’s charts suggests otherwise.

When looking at the monthly chart, several critical factors stand out. First, despite recent performance, Bitcoin has managed to stay above the 50-week and 25-week Exponential Moving Averages (EMA), indicating that bullish sentiment still prevails. This contradicts the “death cross” observed on the daily chart, which occurred when the 50-day and 200-day Simple Moving Average (SMA) indicators crossed bearishly.

While the SMA is a reliable indicator, it is not without its flaws, as it considers all time frames equally. In contrast, the EMA focuses on recent periods, filtering out noise and lag. This makes it a more accurate tool for analysis.

Another notable aspect is the formation of a hammer candlestick pattern on both the weekly and monthly charts. A hammer pattern consists of a long lower shadow and a small body, usually without an upper shadow. This pattern is widely regarded as one of the most bullish signals in the market.

Additionally, Bitcoin has formed a falling channel pattern, which holds two significant implications. Firstly, this pattern resembles a falling wedge, another well-known bullish reversal sign. Secondly, the current pullback is part of the handle section of a cup and handle pattern.

To understand this formation, let’s consider Bitcoin’s recent price action. It reached a record high of $68,838 in 2021, experienced a significant drop to $15,433 in 2022 following the FTX collapse, and then rebounded. From September 2023 to March, BTC rose for seven consecutive months, completing the cup section of the cup and handle pattern. The ongoing pullback is part of the handle, raising the likelihood of a future bounce back and a new record high.

Furthermore, the Relative Strength Index (RSI) is exhibiting a similar cup and handle pattern on the monthly chart.

But that’s not all—the monthly chart also reveals what appears to be a perfect impulse Elliot wave pattern. The first phase occurred in early 2023, followed by the second phase between May and September of that year. The third wave, which is typically the most bullish, took place from September to March and is currently in the fourth wave. It is highly likely that the coin will soon enter the fifth and final wave, known for its strong bullish potential.

However, it’s crucial to note that these patterns take time to unfold. For instance, even a basic chart pattern like the hammer requires Bitcoin to end the month within its range to confirm its validity. Gold’s cup and handle pattern, shown in the chart above, took several years to form.

Interestingly, Bitcoin’s price movement mirrors that of gold. The chart shows that gold reached a record high of $1,922 in 2011, then retraced to a low of $1,050 in 2015. It subsequently bounced back and retested the previous level in 2020. After consolidation between July 2020 and November of the same year, gold broke out and soared to a new record high of $2,500. The Relative Strength Index also showed a cup and handle pattern during this period.

Several potential catalysts could impact the Bitcoin price in the coming years. For starters, Donald Trump aims to reduce the independence of the Federal Reserve, which would likely lead to a significant decline in the US dollar—a scenario in which Bitcoin typically thrives. This is evident from the Turkish lira’s significant depreciation. Additionally, the Federal Reserve may begin cutting interest rates in its next meeting, scheduled for September, due to the alarming increase in the unemployment rate. Bitcoin and other assets tend to perform well in a low-interest-rate environment. Furthermore, there are indications of increasing institutional investment in Bitcoin, as major banks such as Goldman Sachs, Morgan Stanley, and Wells Fargo have purchased Bitcoin ETFs worth billions of dollars.

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