• Bitcoin price continues to consolidate around $16,500, supported by a trend line.
  • Investors can expect bullish convergence to play out when combined with optimistic on-chain metrics.
  • Invalidation of the bullish thesis will occur on the flip of the $15,550 support level.

Bitcoin price is in a good place to trigger another bear market rally from a high-time frame perspective. This development, combined with the optimistic outlook seen in on-chain metrics, further strengthens the possibility of a happy ending to 2022.

Bitcoin price and potential plays

Bitcoin price shows a falling wedge formation on the three-day chart described by using trend lines to connect with two lower highs and three lower lows. The third retest of the lower trend line is still in play as BTC hovers around $16,500. 

As mentioned in a previous article, Bitcoin price has produced lower lows for the last five months while the popular momentum indicator Relative Strength Index (RSI) has set up higher lows. This nonconformity or ‘convergence’ is a sign of budding bullish momentum and is indicative of a market reversal.

Therefore, investors can expect Bitcoin price to climb 17% and tag 2022’s highest traded volume level at $19,011, aka Point of Control (POC).

Since investors are still reeling from the Luna, Three Arrows Capital and FTX collapses, this outlook might seem hard to come to terms with. But an even more bullish outlook could unfold should Bitcoin price flip the POC into a support level. 

This development could attract sidelined investors, causing a spike in buying pressure. Such a scenario could propel BTC to tackle and overcome the declining trend line of the falling wedge. This trend line connects the November 2021 and March 2022 levels.

Hence, a decisive three-day candlestick close above this blockade will signal a shift in the narrative and kick-start a 54% upswing to $32,191. The target for this breakout is obtained by measuring the distance between the first swing high and swing low of the falling wedge and adding it to the breakout point at $20,560.

While the 17% move mentioned above might seem implausible to investors in this bear market, they should not be caught off guard should the 54% upswing scenario unfold. 
BTC/USDT 1-day chart

BTC/USDT 1-day chart

Post-Thanksgiving on-chain landscape for BTC 

Supporting this illustrative outlook for Bitcoin price is the 24-hour active addresses index, which spiked up to 1.15 million on November 20. The last time this indicator hit 1.15 million was in May 2022. This on-chain metric suggests that despite multiple major crashes in the crypto industry, investors are still interacting with the Bitcoin blockchain and are highly active.

BTC 24-hour active addresses 

BTC 24-hour active addresses 

Taken alone, the active addresses metric does not mean anything, however, when combined with the Supply Distribution indicator developed by Santiment, the two provide a fuller picture. The proverbial ‘whales’ show strong signs of strong accumulation after the November 22 crash. Over the past three days, the combined balance of 100 to 10,000 BTC addresses has spiked by roughly 60,000 BTC, indicating that these investors are clearly buying the dip.

BTC supply distribution

BTC supply distribution

It is interesting to note that the ‘buy the dip’ keyword does not have the same momentum on November 22 as it did during the November 10 crash. This decline in the Social Volume metric indicates that retail investors got burned during the second nosedive on November 22. 

Combining this knowledge with the fact the accumulation is seen in whales holding 100 to 10,000 BTC, one can assume that this is a wealth transfer from weak hands to strong hands, and ‘smart money’.

BTC social volume

BTC social volume

To sum it up, a year-end rally seems to be cooking for Bitcoin price. Whether it is a 17% upswing to $19,011 or an explosive move to $32,191, investors need to stay prepared.

On the other hand, if Bitcoin price fails to react to the bullish indications and produces a three-day or weekly candlestick close below the $15,550 support level, it will invalidate the bullish outlook. This development will create a lower low, sowing fear into the minds of investors and triggering a selling frenzy.

In such a situation, investors can expect Bitcoin price to revisit the support area, extending from $13,575 to $11,898.

 

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.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Jim Cramer urges investors to sell crypto holdings, says XRP, Cardano, Dogecoin and MATIC could go to $0

Jim Cramer urges investors to sell crypto holdings, says XRP, Cardano, Dogecoin and MATIC could go to $0

Jim Cramer is an American TV personality and host of the Mad Money show on CNBC. Cramer urged investors on December 5 to sell their crypto holdings before it is too late.

More Ripple News

Binance gains from FTX collapse as trading activity surges by 30% in November

Binance gains from FTX collapse as trading activity surges by 30% in November

Binance led the exchange market trading volume, which saw an increase to $705 billion last month. Binance has emerged as a key industry entity with the Proof of Reserves and Industry Recovery Fund initiatives.

More Binance Coin news

Crypto lender Nexo announces departure from the United States following fallout with regulators

Crypto lender Nexo announces departure from the United States following fallout with regulators

Following FTX's collapse, many crypto companies have borne the brunt of the United States regulators, but Nexo became the first one to stand up against them. 

More Cryptocurrencies news

Shiba Inu Prediction: A downward dog can only bend so far

Shiba Inu Prediction: A downward dog can only bend so far

Shiba Inu price starts December off on a shaky start. The recent rejection of the previous support zone spells bad news for SHIB’s future price action. A sweep of the lows event could result if market conditions persist. 

More Shiba Inu news

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

A massive bullish move is coming. In the last two articles, we have taken a look at why this is possible from a technical and on-chain perspective. In this weekly forecast, we will take a look at Bitcoin’s monthly performance for the last decade and determine if this bullish outlook is possible. 

Read full analysis

BTC

ETH

XRP