Home Business News Bitcoin rounded bottom attempting upside breakout with target at $110k, says analyst

Bitcoin rounded bottom attempting upside breakout with target at $110k, says analyst

5th Jun 24 9:36 am

Bitcoin has been attempting to rally out of a consolidation phase over the last several days which is part of a larger rounded pattern.

If the price can break out of that pattern the upside target is $110,000 says Cory Mitchell, an analyst with Trading.biz.

He said, “After setting an all-time high at $73,794 in March, the price of Bitcoin worked lower, retreating 23% into the May 1 swing low.

“Since then the price has been moving up, forming a rounded bottom over the last 1.5 months. Rounded bottoms can be explosive patterns when they occur in an overall uptrend (or after a prolonged downtrend). The final phase of this pattern is to push higher out of the slight pullback seen in late May.

“If the price can gain traction above $70,000 it will likely break out to new highs. Based on the average size of past rallies in Bitcoin, following pullbacks in bull markets, that puts a target near $110,000.”

According to Mitchell’s research:

  • The median rally following a 20% or greater pullback in an overall bull market—like the pullback seen in March and April—is 75%.
  • The average rally following such pullbacks is 91% off the low.

The average is the sum of the rallies divided by the number of rallies. The median is the midpoint of all the rallies. Both can be useful for assessing how price typically moves.

If the May 1 swing low of $56,500 is indeed the low of this pullback, 75% added to that is just under $100,000. That is the median rally percentage for moves up following pullbacks in all bull markets going back to 2013.

Another potential target is just under $110,000. That is 91% above the pullback low. The price reaching anywhere in that range would be “typical” of Bitcoin rallies in overall bull markets.

Bitcoin has been in a bull market since the start of 2023.

So far the price has already moved up as much as 27% off the May 1 swing low and is currently 23% above that low.

The following chart shows the path of Bitcoin since 2023, along with the rounded bottom that is currently underway. It also shows the rally percentages that followed 20% or greater pullbacks during that time.

Just because the average or median rallies following a pullback have been 91% and 75% over the last decade doesn’t mean this current rally will be. Averages are composed of both smaller and larger numbers.

If a smaller rally develops the price may not reach these targets before another 20% or greater pullback, or the rally could be much bigger. The averages just provide a measure of what can reasonably be expected.

Plan your trade and always manage risk by having an exit point if the trade doesn’t progress as expected.

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