The Potential for a Price Explosion in Bitcoin
The co-founders of crypto analytics firm Glassnode believe that Bitcoin (BTC) may experience a parabolic rise if it follows a particular pattern. Jan Happel and Yann Allemann, known as Negentropic on social media, point out the saying “History doesn’t repeat itself, but it often rhymes,” often attributed to Mark Twain.
According to Happel and Allemann, Bitcoin is currently forming a bull flag on the weekly chart, which resembles patterns seen during previous bull markets. They note that BTC has reached the 6.618 Fibonacci extension after a correction and is currently undergoing a small correction, similar to what happened in late 2017 and late 2020.
Traders use Fibonacci extensions to estimate profit targets and price pullbacks based on Fibonacci ratios. If history repeats itself, BTC could reach its 6.618 Fib extension in this bull market, potentially leading to a target price of around $120,000.
Bullish Outlook on Equities
Happel and Allemann also express optimism about equities. They argue that trend following is a strong investment strategy and question why anyone would be bearish on equities given the current technical setup. The Nasdaq has recently surpassed its former all-time highs, is above its three-month and 12-month SMA (simple moving average), and has strong momentum according to RSI (Relative Strength Index) and MACD (moving average convergence divergence).
RSI measures the price momentum of an asset, with a reading of 30 or below indicating oversold conditions and a reading of 70 or above suggesting overbought conditions. MACD is used to identify trend reversals and confirm trends.
Hot Take: Bitcoin’s Potential for Explosive Growth
The co-founders of Glassnode believe that Bitcoin could experience a significant price increase if it follows a familiar pattern. By comparing current market conditions to previous bull markets, they suggest that BTC could reach its 6.618 Fibonacci extension, potentially pushing its price to approximately $120,000. This prediction is based on technical analysis and the observation that Bitcoin is currently forming a bull flag on the weekly chart. Additionally, the Glassnode co-founders express bullish sentiment towards equities, highlighting positive indicators such as the Nasdaq surpassing all-time highs and strong momentum in RSI and MACD.
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