Source: Cointelegraph
Original: “When These Two Technical Patterns Form, Bitcoin (BTC) Price Will Definitely Experience a Surge of No Less Than 50%”
Key Points Summary:
Bitcoin price increases are often related to investors' inflation concerns or better-than-expected economic growth data, but clear bullish signals are rare. However, history shows that when three independent events occur simultaneously, it is often accompanied by a price surge of 50% or more for Bitcoin.
When expectations for Federal Reserve policy ease, the cryptocurrency market's leverage is low, and strong retail data supports bullish momentum, Bitcoin tends to experience significant increases. The last time these three conditions were met was in early 2024, when Bitcoin's price rose from $40,000 to $73,500 in seven weeks.
Similar increases also occurred in early 2023, when the same three driving factors worked together to push Bitcoin from $16,700 to $25,100 in seven weeks. The third case dates back to July 2021, which ultimately achieved a 76% price increase.
Bitcoin rose 84% from January 25 to March 13, 2024.
After stagnating around $43,000 in December 2023, Bitcoin's price tested the $48,000 level in early January 2024. After a failed breakout, the price sharply fell to $37,800 by the end of January, coinciding with the start of a seven-week bullish trend. A key factor during this phase was the unusually low perpetual contract funding rate, at only 4% annualized.
Other factors influencing the price reversal include: the U.S. retail sales data for December 2023, released on January 17, 2024, which exceeded expectations with a month-on-month increase of 0.6% (expected 0.4%); and Federal Reserve Chairman Jerome Powell's statements at a press conference on January 31, 2024, which signaled a tightening of monetary policy, indicating that interest rate cuts would not occur in the short term.
Bitcoin rose 50% from January 3 to February 20, 2023.
Before this surge, Bitcoin had consolidated below $18,000 for two months, leading to extremely low demand for leveraged long positions, with the perpetual contract funding rate close to zero reflecting this situation.
The market dynamics changed on January 3, 2023, when Binance's funding rate skyrocketed to 50% within four days. This change coincided with better-than-expected retail sales data for January 2023, which showed a month-on-month increase of 3% (market consensus was 1.9%). Notably, Federal Reserve Chairman Powell also hinted at adopting a tighter monetary policy to combat inflation during a speech at the Swedish central bank on January 10, 2023.
Bitcoin's 76% price increase cycle: July 20 to September 7, 2021.
From July 20 to September 7, 2021, Bitcoin rose 76%. In the month prior, Bitcoin's price had fallen below $30,000 from $40,000, leading to a gloomy market sentiment. In the following two weeks, Bitcoin's annualized funding rate suddenly jumped from 0% to 37%, while U.S. retail sales data for June 2021 unexpectedly increased by 0.6% month-on-month (market expectation was a decrease of 0.4%).
During this period, Powell's remarks at the Jackson Hole Economic Symposium on August 27, 2021, hinted at a potential reduction in the central bank's asset purchases, which was a policy measure to curb inflation.
Bitcoin's next potential surge.
The commonality among these significant price increases is the market's lowered expectations for the Federal Reserve's expansionary policies and the initial low demand for Bitcoin long positions. When these factors coincide with strong retail data, it creates ideal conditions for a Bitcoin bull market, as traders tend to remain cautious before a potential economic recession.
Looking ahead, Federal Reserve Chairman Powell will speak after the central bank's interest rate decision on June 18. Other key dates include the economic beige book released on July 16 and the Jackson Hole Economic Symposium starting on August 21. Also noteworthy are the retail data for May, to be released on June 17, and the June data to be released on July 15.
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This article is for informational purposes only and does not constitute any legal or investment advice. The views expressed in this article are solely those of the author and do not represent the stance of Cointelegraph.
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