Bitcoin Price Rally Hinges on Clearing Key Technical Level

Bitcoin's recent price rally has some analysts wondering if it marks the start of a genuine trend reversal, but technical charts suggest otherwise. According to Gareth Soloway, chief market strategist at Verified Investing, Bitcoin has not yet confirmed a new bull market. The issue is that its price has not broken above its prior pivot high near $82,865, and recent rallies have topped out around $82,300.

Soloway identified two bear flag trend lines from earlier price action that converge right around the current rally's stall point, which could be capping the rally for now. However, he notes this doesn't rule out a breakout, and recent price action has looked 'very, very good' overall.

If Bitcoin breaks above $82,865, Soloway says it would represent the first higher high in the current pattern, opening the door to watching for higher lows on pullbacks. He also compared the length of the current market cycle to Bitcoin's two prior major cycles and found that the 2017 peak-to-bottom cycle took roughly 360 trading bars (about a year), while the 2021 cycle was nearly identical.

Soloway acknowledged the possibility of a shortened cycle, citing gold as an example where its bull market peaks compressed from 31 years to 15 years over time. He suggests this same logic could apply to Bitcoin, potentially explaining why its current cycle arrived faster than the previous ones.