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BTC Wave III setup hints at $200K rally ahead: Analyst

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Where Did Bitcoin’s Retail Go? Look Offchain
Where Did Bitcoin’s Retail Go? Look Offchain

The key take-aways

  • Bitcoin Wave III’s expansion could cause prices to rise as high as $240,000 or $200,000.

  • Despite the flattened futures markets in Q4, long-term structural bullishness remains.

  • Bitcoin may be fueled by the US economic recovery and risk-on attitude.

Bitcoin’s (BTCThe long-term structure of the price is beginning to show renewed strength, as analysts look forward to its next parabolic phase. Market analyst Gert van Lagen says that Bitcoin is once again bouncing back from its simple moving average.

Van Lagen said Wave III is on the horizon. Wave II appears to be nearing completion. The completion of this pattern may push BTC’s price up to between $200,000 and $240,000 within the next few months.

Gert VanLagen analyzes the Bitcoin price. Source: X

Van Lagen “step-like” Elliott Wave Model suggests Bitcoin will form a strong base prior to each breakout. Similar setups in 2019 and 2020 preceded steep rallys. The current consolidation, therefore, could serve as the launch pad for the next parabolic rally.

Jelle, a crypto trader, agreed. stating Bitcoin faces resistance around the midpoint in its long-term ascending channel. Jelle said that once the price channel is broken, the upper limit near $350,000 indicates strong potential for upside.

Jelle provides a Bitcoin weekly analysis. Source: X

Sminston with, a macroeconomic research analyst explained Bitcoin, and risk assets more generally, could be favored by the broader economic environment. The US Purchasing Managers’ Index, a gauge of economic activity, is below 50 since nearly three years. This marks the longest slowdown in the economy’s history, dating back to 1948. Such extended downturns in the business cycle are usually followed by strong recoveries.

This rebound is argued to be a good thing. “mean reversion,” Investors are often pushed back to higher-risk investments, setting up a risky environment. Bitcoin could benefit from the return of confidence in markets, as it is both a high-growth asset and an asset that’s speculative. 

Related: Bitcoin, ETH ETFs see $1.7B outflow, but whale buying softens price impact

BTC CME gap closed, liquidation signs hint at recovery

Bitcoin’s price is still seeking confirmation, even though the structure on a long-term basis remains bullish. BTC closed the CME gap that was formed on the weekend. Now, it is trying to move above $105,000.

Glassnode calculates futures open interest as follows: down After the liquidation of Oct. 10, derivatives trading has slowed across all exchanges. Average BTC Futures Order Size has decreased. also contracted This is due to reduced whale participation and an increase in the influence of smaller retailers.

Bitcoin futures average order size. Source: CryptoQuant

But on-chain liquidity patterns may be pointing to a bullish turnaround. Hyblock Capital’s data revealed that clusters near $100,000 of large liquidations on Nov. 4, and Nov. 7 had preceded minor recovery, which suggests a localized average reversion. 

Source: Hyblock. Bitcoin prices, open interest and liquidity levels. Source: Hyblock

Bitcoin may form a bullish pivot above $105,000 if the recent liquidity pockets near the CME gaps lead to another recovery. Analysts will then reinforce their narrative of an uptrend.

Related: Bitcoin price fills CME gap, but ‘$240M market dump’ stops a $104K rebound

This article contains no investment recommendations or advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.