- Bitcoin has dropped 7.5% since its recent all-time high of ~$123,250, but analysts see this as a potential “perfect bottom.”
- BTC has successfully retested its 50-day EMA, a support level that preceded a 25% rebound in June.
- A classic inverted head-and-shoulders (IH&S) technical pattern now targets a price of $148,250.
Bitcoin has pulled back by 7.50% in the three weeks since it established a new record high of around $123,250.
However, far from signaling the end of the bull run, some analysts believe this recent dip may be the final “shakeout” before a significant breakout, with technical patterns now pointing towards a potential rally to nearly $150,000.
On Sunday, Bitcoin successfully reclaimed its 50-day exponential moving average (50-day EMA) as a key support level, after briefly dipping below it a day earlier.
This particular moving average has historically served as a reliable launchpad for initiating fresh rallies in Bitcoin’s price.
A similar scenario played out in June, for instance, when a brief drop below this very same wave of support preceded a sharp 25% rebound in the cryptocurrency’s value.
Now, it appears that Bitcoin may be repeating this same technical setup. Analyst “BitBull” suggests that the cryptocurrency could be poised for a June-like rally in the coming days.
He argues that even if the price were to drop further into the 110,000-112,000 range, it would effectively establish a “perfect bottom” for Bitcoin, potentially setting the stage for the next significant move higher.
A classic breakout pattern targets $148,000
The importance of the 50-day EMA as a support level is further reinforced by its alignment with the “neckline” of Bitcoin’s prevailing inverted head-and-shoulders (IH&S) pattern.
This classic technical analysis pattern is often seen as a strong indicator of a bullish reversal.
After initially breaking above this neckline, Bitcoin’s price has now pulled back to retest it—a typical post-breakout move. The fact that the price has bounced off this retested level reinforces the validity of the bullish reversal setup.
This successful neckline retest now signals that Bitcoin may be entering the continuation phase of its breakout. According to the…