Bitcoin Price Forecast: Bull Pennant Teases Higher Targets

Bitcoin is attempting to break out of a bull pennant consolidation pattern. So far, it has not done a convincing job of it following Monday’s initial breakout. Yet, it remains poised for a continuation higher. Given the lack of upward momentum following the initial breakout on Monday, the consolidation pattern may yet evolve into a larger or different pattern. Regardless, a bullish continuation signal is first given on a rise above this week’s high of 72,777. The pennant breakout and new record trend high occurs on a rise above the top of the trend and the top of the pennant pattern at 73.836.

Bitcoin Stopped Ascent at 300% Retracement of Previous Correction

There is a blue horizontal Fibonacci line on the chart with a number 3 near the record high. It reflects a 300% retracement of the bearish correction that started from the July 2023 swing high of 31,862. In other words, there is a mathematical relationship between the current high and a prior downswing. An area of interest is presented where either selling or buying behavior may intensify.

Bull Pennant Breakout Follow Through Remains Likely

With the bull pennant pattern showing initial signs of a breakout, Bitcoin is teasing that it wants to go higher. The pennant pattern along with the sharp rally that occurred prior to the pennant formation can be used to identify a likely minimum target objective following the breakout.

Purple arrows show the relationship on the chart, and they indicate a potentially higher target of 92,180. A little lower, a 200% retracement of the decline off the January peak (B) completes at 86,906. However, the more significant target above the March peak is the completion of a large rising ABCD pattern with the CD leg extended by 161.8% of the AB leg.

Also, keep an eye on the relative strength index (RSI). It shows a downtrend line marking resistance of the current decline. A move above the line will provide an additional indication of bullish momentum. Notice that the RSI is currently pushing up against the trendline.

Drop Below 67,463 is Bearish

A failure of the pennant breakout will first be indicated on a drop below Wednesday’s low of 67,463. Certainly, at that point the breakout will not be working properly and is prone to failure at that point. A drop below the lower boundary line would further confirm weakness.

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