TechDev, a crypto analyst (@TechDev_52), recently published a chart analysis that suggested Bitcoin could be nearing its biggest breakout yet. The analysis is based on historical patterns, technical indicators and other factors that point to a possible shift in the markets, which could result in Bitcoin reaching unprecedented levels of price.
You can also find out more about the following: chart TechDev’s graph shows Bitcoin price in USD and its relative price to M1 money (BTC/M1). Bitcoin prices have historically been characterized by distinct price phases known as “blowoff tops,” Then, sharp corrections. On the chart you can see these blowoff tops marked in green. They occurred between 2011 and 2013. The peaks of 2011, 2013, and 2017 were followed by significant corrective movements.
The red cross in the graph indicates that the peak of 2021 did not lead to a top blowoff. This departure from past patterns is noteworthy because it could indicate a shift in the market’s behavior.
TechDev’s chart highlights another key pattern, known as the “descending right-angled broadening formation.” A series of lower highs or lower lows creates this technical pattern. It is a pattern that indicates a time of consolidation where price moves within broadening trends before breaking out. Bitcoin recently broke out of the broadening wedge on this chart, which indicates a shift in trend from consolidation into a new bullish one.
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Analyst comments “Significant. Bitcoin has only seen blow-off tops after breakouts against M1 money supply. And the longer it’s consolidated, the longer it’s run. This breakout follows the longest consolidation yet. In fact, it represents a textbook breakout of a 5 year broadening wedge. The last 5 years have been corrective against M1. BTC is once again impulsive against it for the first time since 2017. We’ve never seen a Bitcoin breakout like this one.”
Bitcoin may outpace 2021’s cycle
TechDev’s analysis also includes a breakdown of Bitcoin versus the M1 money stock. M1 includes checkable deposit money and physical currency, which are the most liquid money forms in the economy. TechDev notes that Bitcoin is now trading above M1 against M1 at a rate not seen since March 2017. The breakout is important because it shows that Bitcoin’s recent increase in price is not driven by an increase of money but rather intrinsic demand.
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TechDev makes the following comment about this break-out: “You’re looking at the first breakout of Bitcoin against M1 money supply since March 2017 when it went historically parabolic for 9 months. Comparisons and trend projections involving 2021 may end up dramatically underestimating things. One interpretation: In 2021 BTC was carried to new USD highs by increased money supply. In 2024 it’s gotten there on its own demand (and thus broke out against M1). Add the anticipated M1 growth this time and we likely see BTC outpace expectations based in part on 2021.”
TechDev’s analysis highlights the importance of understanding Bitcoin’s performance in relation to macroeconomic indicators such as the M1 money stock. Bitcoin’s strong demand is evident when compared to M1. bullish signal Future price movement. According to the historical pattern of blow-off tops that follow similar breakouts, Bitcoin might be entering a brand new phase in price discovery.
BTC is currently trading for $69,032.
Featured image created with DALL·E, chart from TradingView.com
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Source: www.newsbtc.com