Bitcoin price has remained dull in the past few months as it wavered between the resistance and support levels at $90,000 and $108,000.
This consolidation or pause happened after the BTC price surged to a record high of $109,300 in January. Here are the top reasons Bitcoin’s price may explode higher soon.
Bitcoin Price Technical Analysis Suggests a Surge Is Coming
A look at the shorter-term charts shows that the Bitcoin price is not doing much. However, a closer look at the weekly chart suggests that the ongoing consolidation is happening for a reason.
It is part of forming a bullish flag pattern with a tall vertical line or a flagpole and a rectangle-like pattern.
The ongoing price action is part of the rectangle formation. Therefore, based on this pattern, we can assume that the BTC price will eventually stage a strong bullish breakout in the coming weeks.
The other key pattern that predicts this is the cup and handle, consisting of a rounded bottom and consolidation.
This pattern was perfect in Bitcoin’s case, as the cup’s upper side was around $69,000. Bitcoin rose to that level in 2021 and retested in March last year. It then formed the handle section between March and November 2024.
The price target of a cup and handle pattern is identified by first measuring the cup’s depth. Here, the depth is about 75%. Then, one measures the same distance from the cup’s upper part. Doing this brings the Bitcoin price forecast to $122,500.
BTC Price Has Strong Fundamentals
There are other fundamental reasons Bitcoin price will explode higher in the long term, including:
- Historical performance.
- Demand and supply dynamics.
- Geopolitical risks.
First, Bitcoin’s price has historically done well, jumping from below $1 in 2009 to $109,000 earlier this year. However, this surge was not linear. Instead, Bitcoin has experienced major pullbacks in the past.
Last year, it dropped from $70,000 in March to below $50,000 in August. It also crashed below $16,000 in 2022 as the FTX collapse happened and the Federal Reserve hiked interest rates.
Second, Bitcoin demand and supply dynamics are favorable. Retail investors facilitated the first phase of Bitcoin’s surge. This new phase is being helped by institutional investors, who have continued to accumulate spot ETFs, which now hold over $140 billion in assets.
In a note to Bankless Times, Max Teddy, a popular crypto analyst, said:
“Institutional demand will probably keep soaring over time as hedge funds move to Bitcoin because of its uncorrelation with other assets like stocks and bonds. Bitcoin will emerge a pivotal role among investors seeking a viable liquid alternative asset.”
This demand will likely continue as more governments create strategic Bitcoin reserves. More countries will invest in the coin if Donald Trump approves a strategic BTC reserve.
Bitcoin’s supply growth has stalled because of the mining difficulty, and the hash rate has soared to record highs. Therefore, higher demand and low supply growth will push Bitcoin’s price higher in the long term.
Further, geopolitical risks are expected to escalate long-term, leading to more demand for safe havens. Bitcoin has yet to gain acceptance as a safe-haven asset, but we believe it will eventually do so.
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