The recent BTC price surge above $65,000 bears all of the hallmarks of a classic bullish breakout.
Bitcoin (BTC) has the potential to break out of a classic bullish pattern and pick up additional upside cues from its wealthiest investors’ recent accumulation spree by the end of this year.
Bitcoin Bull Pennant is about to break out.
BTC has risen by 6% in the last 24 hours to a three-week high just shy of $66,500. In doing so, the cryptocurrency broke out of a consolidation range formed by two diverging trendlines, resembling a Bull Pennant setup.
Bull Pennants are bullish continuation patterns that appear when an instrument consolidates in a Triangle-like price range after a strong upward move (called Flagpole). It usually ends up breaking out of the range to the upside, with a profit target equal to the length of the Flagpole.
When it comes to confirming a Bull Pennant breakout, Bitcoin checks almost every box. As a result, its chances of continuing its uptrend have increased, with its profit target reaching as high as the height of its Flagpole, which is over $12,300, as shown in the chart below.
After adding the Flagpole height to the point of breakout around $63,300, the bull setup propels the BTC price towards $75,000 and beyond.
Whales go on a BTC buying spree
Bitcoin’s bullish setup received additional confirmation from Santiment’s on-chain indicator, which tracks distribution/accumulation activities of wallets with balances ranging from 10,000 BTC to 100,000 BTC.
The metric revealed that the so-called “Bitcoin whales” have been increasing their purchases.
These entities specifically accumulated 43,000 BTC (worth approximately $2.82 billion) in the last five days and approximately 92,000 BTC (worth approximately $6 billion) in the last 25 days, just as the price rallied to a record high near $67,000, corrected below $60,000, and surged back above $66,000.
The whale-led buying between $60,000-67,000 highlighted their preparations for the future, i.e. they expected Bitcoin to close above its previous record high.
Furthermore, on-chain analyst Willy Woo noted that Bitcoin has been moving away from exchanges and into cold storage in recent weeks. At the same time, deposits of the dollar-pegged stablecoin USDC increased during the same time period, indicating a classing buying pattern.
“Price was previously overheated, indicating a period of consolidation; since then, we’ve seen significant buying from investors while [the] price has been sideways,” Woo wrote in a client note, adding:
“It’s been a good consolidation. Meanwhile, significant whale activity has been observed, implying that BTC’s next price move may be imminent.”
Bitcoin is up nearly 50% in Q4, and is only 2% away from its all-time high of $67,000.