Bitcoin plots a breakout from a classic ‘bull pennant’ as whales pile up

Bitcoin (BTC) has the potential to hit $ 75,000 by the end of this year as it plots a breakout from a classic bullish pattern and takes further bullish cues from the recent buildup of its wealthiest investors.

The breakout from the bull pennant in progress

Over the past 24 hours, BTC has gained more than 6% reaching a three-week high of just under $ 66,500. In doing so, the cryptocurrency has abandoned a consolidation range consisting of two converging trend lines, setup similar to a bull pennant.

Bull pennants are bullish continuation patterns that appear when an asset consolidates within a triangle-shaped range following a strong positive move (called a Flagpole). The price typically breaks the range upwards, aiming for a distant profit target equal to the size of the Flagpole.

Bitcoin meets almost all the requirements to confirm a bull pennant breakout. Hence, the odds of a bullish continuation have increased, with the profit target more than $ 12,300 distant, as shown in the following chart.

BTC / USD daily bull pennant chart. Source: TradingView

The setup places the BTC price on a course towards $ 75,000, after adding the height of the Flagpole at the breakout point around $ 63,300.

Whales accumulate large amounts of BTC

Bitcoin’s bullish scenario

further confirmation from an on-chain indicator of Santiment that tracks the distribution / accumulation activities by wallets with balances between 10,000 BTC and 100,000 BTC.

The parameter highlighted that the so-called “Bitcoin whales” are accelerating purchases.

In particular, in the past five days these entities have accumulated 43,000 BTC (about 2.82 billion dollars) and in the last 25 days about 92,000 BTC (over 6 billion dollars) as the price hit a new record around $ 67,000, tracked a correction below $ 60,000 and back above 66,000 again. $.

Whale accumulation / distribution activity chart. Source: Santiment

The whale-led buying activity in the area between $ 60,000 and $ 67,000 underscored preparations for the future. In essence, the whales expect Bitcoin to exceed its previous all-time high.

Related: Whale indicator reveals a long accumulation trend as BTC targets $ 67,000

Additionally, on-chain analyst Willy Woo pointed out that in recent weeks, more and more Bitcoins are leaving exchanges headed for cold storage. Over the same period, deposits of the dollar-pegged stablecoin USD Coin (USDC) took off, underscoring a classic buying pattern.

Net BTC flows on exchange spots. Source: Willy Woo

Before the price was overheated, it required a period of consolidation, since then we have seen significant buying pressure from investors as the price moves sideways,“Explained Woo in a note to customers, adding:

“It has been a healthy consolidation. Meanwhile, significant activity has been detected from whales, suggesting that BTC’s next price move could come shortly.”

Bitcoin saw a nearly 50% rise in Q4, and is only 2% lower from its all-time high of $ 67,000.

The ideas and opinions expressed in this article belong solely to the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading operation involves risk. You should conduct your own research when making a decision.

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