According to a crypto analyst, Bitcoin (BTC) is preparing for a traditional trading move that might push it beyond $100,000. Founder and CEO of the investing business Capriole, Charles Edwards, referred to the price movement of BTC in 2023 as a “Bump & Run Reversal.”
Bitcoin Exceeds $26,000k Showing Positive Movement
For the first time since June of last year, BTC surged beyond the $26,000 threshold on March 14. The release of the February CPI (Consumer Price Index) report, which verified the expert projections, 0.4% compared to 0.5% in January, was the primary driver that pushed Bitcoin up over 17% to an intraday high of $26,500. BTC is currently trading at $24,667, according to statistics from CoinMarketCap.
As a result, the inflation rate was somewhat lower than in January, dropping from 6.4% to 6.0% year over year.
Bitcoin’s Path to $100k is Assured, But Without a Timeline
The founder of Capriole Investments, Charles Edwards, claims that the price of BTC will soon trade beyond $100,000. Edwards identified a bullish pattern on the weekly chart called Bump And Run Reversal (BARR) without specifying a timeframe for when the first-ever crypto will reach $100k. Edwards predicts that now that the price of Bitcoin has broken out of its weekly logarithmic downturn, the next exponential surge will soon begin.
Textbook perfect Bitcoin “Bump & Run Reversal” bottom is back and the target is over $100,000. pic.twitter.com/w1dvI2r57Q
— Charles Edwards (@caprioleio) March 15, 2023
Significantly, the analyst contrasted the price of BTC with a chart pattern created by Thomas Bulkowski and published in his book “Encyclopedia of Chart Patterns.” The expert issued a warning to investors, noting that other macro fundamental factors could potentially affect Bitcoin price, causing the chart pattern to collapse.
The Bump and Run Reversal Pattern: How Does It Work?
The bump-and-run reversal pattern develops following a swift and significant price increase brought on by excessive speculation. The pattern begins with a lead-in stage during which prices move correctly, and there are no indications of excessive speculation. The lead-in phase’s trend line is moderately steep.
The bump phase, which occurs after the first phase of the pattern, is marked by a sharp rise in prices. The trend line becomes at least 50% steeper than it was in the lead-in phase at this time. Traders should validate the bump pattern by analyzing the max height of the bump about the lead-in trendline.
The lead-in trendline ought to be two times (or more) away from the maximum height of the bump than it is from the peak high of the lead-in phase.
The chart starts to display the right side of the bump once prices have peaked and have begun to descend toward the trend line. After the breakthrough forms on the bump’s left side, the volume expands. As prices cross the lead-in trendline, the run phase begins.
The price may sometimes reverse after crossing the trendline, reaching the trendline’s current level of resistance. All trading styles, including daily, weekly, and monthly trading, can exploit the bump and run reversal pattern as long as they are aware that the movement is not long-term sustainable.
What does Bitcoin’s Bump and Run Reversal Show?
The Bump and Run Reversal (BARR), a type of reversal pattern, happens when excessive speculation pushes prices too far, too quickly, until they hit low levels. Exceptionally low. The pattern was created by Thomas Bulkowski, whose book “Encyclopedia of Chart Patterns” also contained the pattern.
The model is composed of the entry stroke, the bump, and the rise as its three primary parts. In the 3-day chart from November 2021 to May 2022, as Edwards demonstrates in the graph below, the price of Bitcoin formed the introductory phase. This phase starts with a sequence of downward peaks that are essential to the initial trend line.
In January 2023, BTC had a significant upward trend that marked the conclusion of the shock phase and resulted in a price break from the trendline.
Midway through February and again yesterday, the price of BTC returned to the trendline and increased. This signaled the beginning of the upstroke phase, which starts when the pattern is broken. By the middle of 2024, this phase might push the crypto above $100,000.
The reason behind Bitcoin’s Bump-and-Run Reversal
When it was announced that Silicon Valley Bank and Signature Bank, two of the biggest U.S. banks, would be closing, the price of digital gold increased. The American government will bail out both banks. Silvergate was the previous bank to close before these two.
According to experts and economists, the present banking crisis will certainly force the Federal Reserve to scale back its rate increases. Today, the Fed is anticipated to increase the rate by 25 basis points during the FOMC meeting in March.
Some financial experts recently connected the current banking crisis to one that occurred in Cyprus in 2013.
This was, at the time, the main factor that propelled its bitcoin’s rapid growth & bump and runs reversal and helped bring the leading cryptocurrency into the spotlight.
