Bitcoin (BTC) is setting up a classic trading move, which could see it hit $100,000, one analyst says.
In a tweet on March 14, Charles Edwards, founder and CEO of investment firm Capriole, called BTC price action in 2023 a “bump & run reversal.”
Edwards on BTC price: The “bottom is back”
Having passed $26,000 to hit new nine-month highs this week, BTC/USD is in the midst of a recovery rarely seen before.
Despite cooling under $25,000 at the time of writing, longer timeframes are already getting analysts excited after the brutal 2022 bear market.
For Edwards, Bitcoin in 2023 has been straight out of the market’s textbooks. The largest cryptocurrency is attempting to fulfill a “bump and run reversal pattern,” he believes.
The bottom phase of bump and run is defined by investment resource Wealthy Education as follows:
“The bump-and-run reversal bottom is a bullish reversal pattern that begins with a series of descending peaks. Excessive speculation drives prices down until reaching extreme lows. The price action then reverses direction to the upside and marks the end of the downtrend.“
“Textbook perfect Bitcoin ‘Bump & Run Reversal’ bottom is back and the target is over $100,000.” Edwards summarized.
Accompanying charts described the bump and run phenomenon, showing BTC/USD in the latter stages of its trend break and cementing a key resistance/support flip.
What happens next — the so-called “uphill run” — gives the pair a six-figure target.
Nonetheless, Edwards acknowledged that, like any chart pattern, bump and run might “fail” and should not be used as the basis for a trading or investment strategy.
Key Bitcoin price resistance ahead
For others, sky-high BTC price valuations remain a fantasy.
Related: Fed starts ‘stealth QE’ — 5 things to know in Bitcoin this week
Directly above the current spot price lies an area of heavy resistance that Bitcoin bulls have failed to overcome so far. Key moving averages (MAs) on weekly timeframes likewise remain unchallenged.
“Best case scenario for BTC is to break the 200 MA on this current move,” trader and analyst Rekt Capital argued about the current interplay between BTC/USD and the 200-week MA.
He showed that previous rejections had delivered double-figure losses.
“Clearly, the 200 MA is weakening as resistance. However, what if the 200 MA rejections are declining by 10% each time?” he continued.
“If BTC fails to break the 200 MA soon, could BTC reject by -12%?”