Bitcoin price is trying to get back above $ 40,000 and with that milestone, $ 50,000 and $ 60,000 stand in the way between it and another new all-time high.
Though things have been in bearish last quarter, the next two quarters for Bitcoin could be the most profitable yet if a recurring theme with a hammer reversal and golden ratio leads to a similar outcome. Here’s a closer look at the chart and what it might suggest happening in the crypto market from here.
The recurring hammer reversal with golden results
Bitcoin is at a very unusual point in its market cycle. The bull run that everyone expected would bring the leading cryptocurrency by market cap to well over $ 100,000 per coin may have already fizzled out. At least that is how it looks to most observers.
Related reading | Five bullish monthly charts suggesting BTC is about to explode
By definition, a 20% drop in stocks would create a “bear market” by most standards. With crypto, the whole thing can collapse by more than 70% and still be kind of bullish. And that is exactly what could have happened lately as the Bitcoin price chart is now a recurring bullish signal that has delivered “golden” results.
If the cycles lengthen, there could be six more months of bull market | Source: BLX on TradingView.com
The Bitcoin bull market could extend for another 6 months from here
The graph above shows Bitcoin price over the past decade along with each of the three major boom and bust cycles we’ve seen so far. The most recent has spiked Bitcoin from $ 168 to almost $ 20,000.
What is presumably the current rally has paused at around $ 65,000 and pushed the cryptocurrency back to $ 30,000. Support levels have held up since then and a Japanese hammer candle has formed on the monthly timeframe.
A hammer is usually a bullish reversal signal that occurs as Bitcoin is well above its previous all-time high from the last cycle. Where the support is held is not simply chosen at random, but is the golden ratio of 1.618.
Related reading | Fundamentals suggest that cryptocurrency is massively undervalued
Comparing past bull cycles, Bitcoin has almost always held the golden ratio of 1.618 and formed a hammer before climbing to new all-time highs.
With bull cycles lengthening by a full month after each hammer reversal in the past, this suggests that Bitcoin could have another six months of bull run.
It could also mean that the top cryptocurrency will eventually hit the predicted high prices, and this recent downtrend has been nothing but a forcible cleanup.
Follow @TonySpilotroBTC on Twitter or via the TonyTradesBTC Telegram. The content is educational and should not be viewed as investment advice.
Featured image from iStockPhoto, charts from TradingView.com