Bitcoin prices faced significant pressure this week amid ongoing trade concerns, yet two unusual patterns suggest a potential rebound ahead.
Bitcoin (BTC) experienced fluctuations, as the crypto fear and greed index dipped into the fear zone at 35. These declines were largely driven by persistent fears of a trade war between the United States and key trading partners.
The U.S. has initiated tariffs on Chinese imports, potentially impacting trade volumes exceeding $450 billion. Although tariffs on Canadian and Mexican goods have been paused, there is speculation that they could be reinstated next month.
These trade uncertainties have heightened anxiety among market participants. The crypto fear and greed index has fallen to 35, reflecting widespread caution, while another market index has dropped to 39.
Market dynamics have kept Bitcoin on edge, with many investors opting to stay sidelined. Strategic purchases of Bitcoin have stalled, and recent data show weak futures open interest. Additionally, inflows into Bitcoin ETFs have declined to approximately $57 billion, down from this year’s peak of $68 billion.
Technical Indicators Signal Possible Rebound for Bitcoin
Recent weekly charts reveal that Bitcoin has established two rare chart patterns, typically associated with significant future gains. The first pattern is a “cup and handle,” formed from November 2021 to November 2022. This pattern features a horizontal line along the top and a rounded bottom, creating the cup shape, followed by a consolidation phase.
The profit target for this pattern is calculated by measuring the cup’s depth and projecting that distance upward from the top. In this instance, the cup’s depth is about 80%, suggesting a potential price rebound to $123,000.
Additionally, Bitcoin’s recent consolidation fits within a bullish flag pattern, characterized by a long vertical line followed by a rectangle formation. The height of this flagpole is approximately 55%, indicating a possible breakout price of $166,000.
However, it’s important to note that achieving this predicted Bitcoin price could take time, as the formation of these patterns often spans several years. For instance, the cup and handle pattern took nearly three years to fully develop. Thus, while a surge to $166,000 may be anticipated, the timeline for such a movement remains uncertain.
