Bitcoin indicators hint for an ‘incredible 12-month rally’

As Bitcoin (BTC) recently broke through the $70,000 resistance level, its technical patterns hint at a substantial rally over the next 12 months, as prominent analysts highlighted.

This move from a seven-month bearish megaphone pattern, which had previously kept BTC’s price in a consolidation phase, marks a significant bullish shift.

According to an October 28 TradingView analysis by TradingShot, this breakout is reinforced by three key indicators, suggesting BTC could be on the cusp of a powerful rally in the year ahead, potentially targeting the $200,000 mark.

Key technical indicators supporting Bitcoin’s bullish outlook

The current bearish megaphone breakout is a part of Bitcoin’s seven-year ascending channel. This long-term ascending channel has supported Bitcoin’s price movements over the past two cycles, acting as a foundation for each major rally.

Midway through the 2018–2021 cycle, a similar bearish megaphone pattern appeared and lasted 12 months before Bitcoin broke above it, fueling a rally that eventually led to its cycle peak.

The current pattern, combined with this channel, sets a historically supported bullish backdrop for BTC.

Another crucial signal is BTC’s reliance on the 50-day Moving Average on a weekly time frame (1W MA50) as a support level. This trend line has acted as critical support in Bitcoin’s previous bullish cycles, notably serving as a floor for prices once BTC regained it after breaking out of a consolidation phase.

Since March 13, 2023, Bitcoin has tested the 1W MA50 three times, most recently holding above it as of August 5, 2024.

The break out from this support level echoes the pattern seen in mid-2020, where BTC maintained support above the 1W MA50 until it reached the cycle top, suggesting that as long as BTC remains above this level, the bullish outlook is intact.

The third and potentially most compelling indicator is the one-week MACD bullish cross, which appeared for the first time in over a year on October 23, 2023. This cross marks the end of seven months of non-bullish price action, pointing to a shift in momentum as buying pressure increases.

Given this timing, the MACD cross reinforces the breakout from the bearish megaphone pattern and strengthens the case for a long-term bullish trend.

Potential price target and outlook

With these three indicators, the seven-year channel up pattern, 1W MA50 support, and the MACD bullish cross, aligning in a “triple bullish combo,” Bitcoin could see a rally similar to the 2020–2021 cycle.

If Bitcoin follows the pattern seen in the last bull cycle, the next rally could see a 615%, which would push BTC toward the $200,000 mark within the next 12 months.

Even a conservative replication of the previous rally could bring BTC well over $100,000, with $200,000 remaining a plausible target, especially if a catalyst, such as institutional adoption or ETF approval, boosts demand.

Key factors influencing Bitcoin’s trajectory

These projections are grounded in historical performance, but they hinge on several key factors that will influence Bitcoin’s future trajectory.

One of the most discussed potential catalysts for Bitcoin’s next rally is the U.S. Presidential election. Market sentiment indicates that a Donald Trump victory could provide a significant boost to Bitcoin, with bullish outlooks already being priced in by some analysts.

Upcoming macroeconomic events, such as the Federal Reserve’s rate policy and increased institutional adoption, could act as additional bullish catalysts.

For instance, U.S. spot Bitcoin ETFs have recently recorded over $3 billion in net inflows, with demand reaching its highest level in six months, underscoring growing institutional interest.

Adding to the optimism, a Forbes report reveals that China is considering approving a new wave of debt totaling over 10 trillion yuan (approximately $1.4 trillion) as part of a fiscal package aimed at jump-starting its stalled economy. Analysts predict this move could drive Bitcoin prices significantly higher.

To further solidify Bitcoin’s next move, crypto trading expert Alan Santana also noted that surpassing the $70,500 level could establish a stable uptrend, likely pushing the price toward $100,000, as reported by Finbold.

Bitcoin price analysis

As of press time, Bitcoin was trading at $71,567, a 1.4% increase in the past 24 hours. The monthly chart shows gains of over 9%.

With Bitcoin on the verge of a potential breakout, indicators suggest an exciting yet volatile period ahead, possibly pushing prices well into the six-figure range.

However, despite favorable historical trends, investors should remain cautious. The market remains vulnerable to external influences, including macroeconomic shifts and regulatory decisions, which could alter this optimistic outlook.

Featured image:
Dusan Zidar – October 29, 2024. Digital Image. Shutterstock.

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