Bitcoin’s sensational end to April has seen it scrape back inside the tail end of a four and a half year wedge, following seven green weekly candles in a row that have seen it rocket 2.5x to tip $9,450. Having managed this unlikely feat, what can we expect from hereon in? We present the bullish and bearish cases as to where Bitcoin can go from this point.
The Bullish Case
Bitcoin has shown extraordinary strength in recovering from its mad March mauling where it fell 51% in 24 hours. This has been heavily driven by the halving narrative, and it has to be wondered where Bitcoin would have hit had it not been for the collapse.
The halving is still some two weeks away, meaning that there is plenty of time for further gains to be made. A cool off now is natural, but were Bitcoin to reestablish a firm footing at $9,000+, then it isn’t too much to assume that it could spring past $9,800, which would see it pop out above the triangle.
Consolidating above this point would mean that a downward trend that began in December 2017 has been broken, leading to the possibility that the next bull run is underway.
The Bearish Case
The bearish case has it that Bitcoin is now exhausted, and that $9,450 represents the top after seven weeks of continuous green candles. While the halving narrative has helped to drive the price up to this point, it always tops out in advance of the event itself, meaning that the timing would be perfect for it to do so now.
Technically Bitcoin looks in a bad way too. Such an extended run is inevitably followed by a reversal, and, having landed itself in the middle of the wedge, Bitcoin has already fallen back to near the support line:
Given what we know of Bitcoin’s performance, it is highly unlikely that this inorganic run will leave us at or near the peak, especially as a halving run up has traditionally been followed by an extended period of regression. To continue up from here would be defying market trends as well as Bitcoin’s history, and what goes up must come down.
The FullyCrypto View
All factors considered, there is much more evidence to suggest that Bitcoin is going to take the bearish route and drop out of this wedge, given just how quickly it has risen and the fact that history often repeats.
Doing so will likely lead to a period of 3-6 months of consolidation, but this is nothing to be feared, and indeed presents a great opportunity to stack more Bitcoin in advance of a hopeful bull market in 2021.
