π Bitcoin is BREAKING Out β This is the TRIGGER
Institutional Crypto Research Written by Experts
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π1-10) No, we are not talking about the Bitcoin halving on April 22. We have a controversial view of the halving, which we will share in a later report. Our trigger for a Bitcoin price jump is instant β we are talking days, not weeks.
π2-10) Bitcoin could be making an immediate big move, as the break of the downtrend indicates β the main barrier being the trend line at 43,839. If Bitcoin trades above it, we could quickly move to 48,000.
π3-10) After last month's consolidation period, Bitcoin almost reached the downside level of our 38,000 correction target (actual low 38,500), which we defined when Bitcoin traded at 44,300.
π4-10) But as we showed in the book βBitcoin: The Irresistible Rise,β prices do not move randomly. There is often a big trigger, such as a policy decision or another significant event. One big event is around the corner, and we think this event will lift Bitcoin above 45,000 within the next few days.
π5-10) Bitcoin perpetual futures open interest indicates new long positions are being deployed as Bitcoin builds a solid base around 43,000. Open interest rose from $7bn in September to $12bn in early January before we saw $2bn of position unwinding. Open interest has increased to $11.2bn over the last few days.
π6-10) The Bitcoin funding rate has room to expand, indicating that more longs can be deployed. Implied volatility has declined to 41%; upside calls are cheap to get leverage over the next two weeks β which includes the Chinese New Year.
π7-10) We are three days away from the start of the Chinese New Year, and historically, when Bitcoin was bought three days before and sold ten days after the Chinese New Year, the average return has been +11% for a two-week holding period.
π8-10) The lowest return was in 2019, when Bitcoin rose +3%, and the strongest was in 2021, when Bitcoin rallied +24%. But besides those two βoutliers,β Bitcoin rallies during Chinese New Year were evenly distributed at around +9% to +13%.
π9-10) Bitcoin went up each year during the last nine (since 2015) with a T-Stat (probability) of 95%, which is very high. This is because returns have been relatively evenly distributed without any significant outliers. Hence, the high T-Stat should give us confidence that this signal could work again.
π10-10) Our three reversal indicators are all bullish. When Bitcoin traded at 40,100, we flagged those indicators and turned bullish, narrowly missing the low but having good risk/reward entry points. Our upside target remains 52,000 by mid/end March, as we identified through our Elliot-Wave analysis. We are in Wave (5). A break above 43,839 would confirm that Bitcoin could rally towards 48,000 as the next minor target.