According to Capriole Investments founder Charles Edwards, seasonality in the stock and cryptocurrency markets, along with Bitcoin on-chain data, suggests that BTC prices could remain consolidated for four to five months.
In a new report, Edwards said Bitcoin continues to oscillate within the highs of its cycle range in the $58,000-$65,000 region, with consistent weekly closes above $58,000 “supporting the continuation of the longer-term trend.”
Edwards likened BTC’s price action to gold, which has formed a “giant cup and handle” pattern over the past 13 years, with the “cup” lasting four years, noting how Bitcoin shows the same chart pattern.
Given the similarities between Bitcoin and gold, Edwards noted that BTC is likely to take “up to nine months to form a cup before a measured rally.”
Edwards said.
“The technical picture remains bullish if the price stays above $58,000. “The longer we stay at the top, the more likely this structure is to coalesce into a classic ‘cup and handle’ pattern, which will typically see a strong price rally.”
Despite the promise of the cup-and-handle pattern, Edwards observed that Bitcoin’s supply delta and CDD (90 coins destroyed days) indicators are forming rounded tops. Edwards explained that Capriole Investments uses each to identify the top of the cycle, and “we are at similar mid-cycle pit stops.”
“Nonetheless, this chart tells us that we can expect at least a few months (up to six months) of sideways movement and volatility before the trend resumes. “Two months have passed today.”
Edwards also said he is closely watching the Capriole Bitcoin Macro Index, an index that combines more than 50 of the most powerful Bitcoin on-chain and macro market indicators, which shows that BTC “continues to be risk-averse.”
Risk-off refers to market sentiment where investors are reducing risk exposure and focusing on protecting capital.
However, the report noted that “most other indicators suggest that there is still quite a bit of room for this cycle to run.”
Related: Bitcoin Analysis Predicts $74K Next as BTC Price Try to Maintain 7.5% Rise.
Investment management firm ARK Invest corroborated Edward’s views, agreeing that Bitcoin remains bullish. ARK Invest analysts demonstrated that the previous halving event set the stage for BTC’s long-term momentum.
The report noted that each halving was a “harbinger of upward momentum over the long term,” adding:
“It may be too optimistic to assume that the price of Bitcoin will triple in a year after this halving. In other words, this chart highlights instances where Bitcoin’s scarcity is increasing over a meaningful period of time.”
If the halving cycle goes as expected, Bitcoin price could enter a parabolic upward trend beyond the $180,000 to $200,00 price range if BTC price triples.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.