Bitcoin has been on an absolute roll over the past month, surging from $6,400 to $9,200 in a jaw-dropping fashion. Altcoins have followed suit, posting even more impressive gains as buyers have finally stepped in.
Prices have since stalled, with BTC now trading at $8,500, as just reported by NewsBTC. Despite this 8% drop from the local high, a prominent trader is sure that as long as Bitcoin holds a price level, it will remain in a short-term parabolic trend that will bring the cryptocurrency’s price into five digits.
Bitcoin Needs to Hold This Level to Go Parabolic
Over the past few months, there have been few analysts charting out Bitcoin’s price action as eerily accurate as Dave the Wave.
The pseudonymous yet respected analyst called in the middle of 2019 that BTC would bottom at $6,400, and it did, with the price rebounding decisively off that level on at least one occasion.
Dave recently posted the below analysis on Monday, showing that BTC is in the midst of going near-vertical in a short-term parabolic uptrend. The parabolic uptrend he depicts is playing out, though for it to continue, the price will need to hold $8,600.
If the price can hold that level over the coming day or two, his chart suggests that Bitcoin will continue to go parabolic above $10,000 in a move that will bring it 40% higher from the current price of $8,500 to $11,500.
Fractal still alive… pic.twitter.com/NoY5igvRCw
— dave the wave (@davthewave) January 21, 2020
Although BTC is on the verge of losing the parabolic uptrend line, there is a confluence of bullish technical and charting-related factors that support bulls.
Firstly, Bitcoin, with this latest surge higher, has broken above a descending channel that has constrained upward price action for over six months.
Secondly, a key price signal is about to flash on a macro basis. This signal being a bullish cross in the one-week Moving Average Convergence Divergence (MACD) indicator. The last time this technical signal was seen was in February of 2019, just months prior to a massive price explosion that brought BTC from the depths of the $3,000s to as high as $14,000 in a few months’ time.
Long-Term Parabolic Trend Forming Too
Although the short-term parabolic trend seems to be intact as shown by Dave, the long-term one for Bitcoin, one that will bring prices above $100,000, has yet to form.
As reported by this very outlet earlier, Bitcoin will need to break above a certain price point to confirm that a rally to $50,000 and beyond is on its way:
“History tells us that a weekly close above the 0.65 fibonacci will send BTC into a new parabolic bull run. The 0.236 fib has often acted as a bottom and the 4.23 fib has been exceeded each time. This means a weekly close above $14,200 would see BTC reach over $75,000,” trader NebraskanGooner remarked while referencing the levels marked on the below chart.