Crypto trader Kevin Svenson believes Bitcoin (BTC) is headed close to $100,000 following this week’s marketwide tumble.
Svenson tells his 79,000 YouTube subscribers that Bitcoin has formed a bullish divergence pattern on the daily chart.
A bullish divergence occurs when the price of an asset is trading down or sideways while an oscillator such as the momentum indicator relative strength index (RSI) is in an uptrend.
The signal suggests that bullish momentum is on the up and up.
Says Svenson,
“We got actually a slightly higher low in the RSI – you could also call it flat support, horizontal support. And upon that flat support, we had lower lows in price. That is a bullish divergence.
And so what is happening on the Bitcoin chart? Well, what we see is a broadening pattern of sorts – lower highs but even lower lows.”
A broadening pattern is a technical formation that can be viewed as a bullish continuation pattern if the asset manages to take out its diagonal resistance.
Svenson says that Bitcoin could skyrocket by 60% from current levels if BTC rallies above the pattern’s resistance at around $68,000.
“Going from the low [of around $49,000] to the potential breakout zone [at around $68,000] and then you look for a target using that, that actually lands us towards $97,000. So that is the target of this pattern.”
Bitcoin is trading at $60,555 at time of writing.
Using the Fibonacci extension tool, the analyst says that $88,000 and $113,000 are the two other targets in his sights – representing potential gains of 45% and 86%, respectively.
On when Bitcoin could reach his price targets, Svenson says,
“Let’s not get ahead of ourselves; it’s going to take quite some time for this to play out fully. Price may actually end up, you know, squeezing into this range [between $49,000 and $70,000], chopping around for quite a while before getting the breakout. That breakout could take place in September.”
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