Bitcoin (BTC) has the potential to rise toward $75,000 by the end of this year as it breaks out of a classic bullish pattern and picks additional upside cues from its richest investors' recent accumulation spree.
Bitcoin Bull Pennant breakout in play
BTC rallied over by 6% in the past 24 hours to reach a three-week high just shy of $66,500. In doing so, the cryptocurrency broke out of a consolidation range consisting of two diverging trendlines, a setup reminiscent of a Bull Pennant.
Bull Pennants are bullish continuation patterns that appear when an instrument consolidates in a Triangle-like price range following a strong move higher (called Flagpole). It typically ends up breaking out of the range to the upside, eyeing a profit target at length equal to the Flagpole's size.
Bitcoin ticks almost all the boxes when it comes to confirming a Bull Pennant breakout. As a result, its likelihood of continuing its upside boom has risen, with its profit target sitting as high as the height of its Flagpole, which is over $12,300, as shown in the chart below.
The bull setup puts the BTC price on the way towards $75,000, after adding the Flagpole height to the point of breakout around $63,300.
Whales enter BTC accumulation spree
Bitcoin's bullish setup received additional confirmation from an on-chain indicator by Santiment that tracks distribution/accumulation activities of the wallets with balances between 10,000 BTC and 100,000 BTC.
The metric highlighted that the so-called "Bitcoin whales" have been accelerating their buying spree.
Specifically, these entities accumulated 43,000 BTC (worth about $2.82 billion) in the last five days and about 92,000 BTC (over $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 the $60,000–67,000 area underscored their preparations for the times ahead, i.e., they anticipated Bitcoin to close beyond its previous record high.
In addition, on-chain analyst Willy Woo noted that Bitcoin continues to move off exchanges to cold storage in recent weeks. At the same time, the deposits of dollar-pegged stablecoin USD Coin (USDC) surged in the same period, underlining a classing buying pattern.
"Price was previously overheated, calling for a time of consolidation, since then we've seen significant buying from investors while [the] price has been sideways," wrote Woo in a note to clients, adding:
"It’s been a healthy consolidation. Meanwhile, significant whale activity has been spotted which suggests BTC’s next move in price may come soon."
Bitcoin is up by nearly 50% so in Q4, just 2% under its all-time high of $67,000.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.