The US-based crypto exchange Kraken has released a report for its VIP traders to the public, which says Bitcoin is on the verge of a multi-year breakout that could trigger a new bull market.
The document highlights the leading cryptocurrency’s movements inside a large bullish pennant since 2017. The pattern, Kraken says, suggests that the digital asset is in a multi-year consolidation in preparation for the next move up.
“If Bitcoin can break through the pennant, surpass $10,500, and thus set a higher high in the macro trend, the case could be made that Bitcoin is entering a new bull market.”
But Kraken says Bitcoin is not yet out of the woods. The crypto exchange also paints a bearish picture where the leading cryptocurrency respects the diagonal resistance.
“Should Bitcoin fail to move higher, a backtest of the pennant’s support at ~$6,200 would be possible.”
The crypto exchange notes the fact that the top cryptocurrency has been trading close to the diagonal resistance of the pennant at around $9,800 for five straight weeks. The report stresses that a breakout or a rejection could ignite a dramatic spike in volatility.
Kraken’s expectation of heightened volatility in the coming weeks aligns with the rise in Bitcoin’s mempool transactions, a metric that indicates the number of unconfirmed transactions on the network. The crypto exchange explains that a recent spike in unconfirmed transactions may precede a period of elevated volatility.
“On May 21, Bitcoin’s 7-day average mempool transaction count surpassed 47,000, its highest level in more than 28 months.”
You can check out the entire report here.