Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Bitcoin’s price was trading above $35,000 at press time, with the cryptocurrency aiming to head higher as it bounces off a consolidation pattern on the charts. This pattern suggests that the consolidation might keep Bitcoin grounded for a day or three. This would also allow altcoins to trend higher, especially considering the 6% drop in dominance in the last 40 days.
Although the consolidation pattern might be boring, it presents a massive bullish opportunity, one that might push BTC to $55,000 or $65,000 before March 2021.
Bitcoin 4-hour chart
Source: BTCUSD on TradingView
The consolidation pattern is a symmetrical triangle with the price nearing the end of the pattern. A breakout can be expected in the next 24 to 72 hours. At press time, BTC had hit the lower trendline and was expected to bounce higher. If the bounce is successful, the uptrend might continue up to the $37,000-$38,000 range, but not beyond it.
Since the prior trend is a parabolic bullish uptrend, this consolidation pattern becomes a bullish pennant. Hence, the target for this will be the vertical distance of the prior trend measured from the center of the consolidation pattern. Hence, a 76% surge from the apex of the triangle would yield in Bitcoin hitting $65,000
Assuming the breakout begins with the current bounce, the target will be around $56,000. However, there seems to be a coinciding resistance level at $48,000, one where the price will retrace before it continues on its journey. Either way, Bitcoin’s price hangs in the balance as it treads this consolidation pattern. While a break higher would continue the bull run, a break lower could spell disaster for the cryptocurrency.
Conclusion
Considering the number of whales that have invested before the bull run, this consolidation seems to be a bullish development. Hence, a break lower would be difficult, but not impossible or unlikely. Ergo, it is advised to keep spare cash for a dip, should it ever come.
