- Bitcoin price is targeting a 15% surge according to a technical pattern that appears to be forming.
- There are a few key hurdles for BTC to overcome before it can achieve the bullish target.
- The lack of demand for leveraged long positions raises concern for the bellwether cryptocurrency.
Bitcoin price is forming a technical pattern that suggests that it could surge by 15% toward $56,219 if BTC manages to slice above a critical level of resistance. However, the potential for the bellwether cryptocurrency to surge may fall short as the spread between futures and spot prices has shriveled compared to the rally earlier this year.
Bitcoin price aims for 15% bounce
Bitcoin price has been forming an inverse head-and-shoulders pattern on the 12-hour chart, suggesting a bullish outlook for the leading cryptocurrency.
The governing technical pattern suggests that Bitcoin price may be headed for a 15% climb from the neckline. However, a few obstacles remain before BTC could achieve the target given by the chart pattern at $56,219.
BTC/USDT 12-hour chart
The first obstacle is at the breakout line given by the Momentum Reversal Indicator at $48,000, then the neckline of the inverse head-and-shoulders pattern at $49,450.
The IntoTheBlock’s In/Out of the Money Around Price (IOMAP) metric indicates that the largest cluster of resistance ahead for Bitcoin price is at $49,405, where 454,780 addresses purchased 338,040 BTC.
Investors should note that only if Bitcoin price slices above the neckline of the prevailing chart pattern would confirm the bullish thesis, and only then can it be used to anticipate price moves.
Should Bitcoin price surge above the neckline, BTC still faces the 61.8% Fibonacci extension level at $51,167 before reaching the target given by the technical pattern.
Currently, Bitcoin price finds meaningful support at the 50% Fibonacci extension level at $46,901. The IOMAP shows that there appears to be ample support for the leading cryptocurrency, with the next large cluster of 801,870 addresses that purchased 422,280 BTC at an average price of $46,298.
However, should Bitcoin price fall below $46,901, the bullish outlook could be at risk. A spike in selling pressure could see BTC crash toward $44,173, voiding the governing technical pattern, and the rally could be short-lived.
In addition, the recent recovery from July lows has been missing a key aspect, as cryptocurrency traders have not increased their leverage. Demand for leveraged long positions has been muted, as the spread between the Bitcoin futures and spot price has diminished compared to the February rally this year.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.