You may not realize it yet, but the price of bitcoin could be in a bull market, on the cusp of a major breakout toward its most bullish phase yet.
bitcoin Could Turn Impulsive If 2023 High Breaks
bitcoin price is back above $31,000 after spending more than a year in the $20,000 range. A higher high than the current 2023 record, which is currently less than $1,000 away, could send the leading cryptocurrency into an acceleration.
If the price action rises from here, there is a strong possibility that BTCUSD has entered what is called a momentum phase. A momentum phase is the most bullish (or bearish) point of any trend, just before things start to accelerate.
This only happens when certain psychological price thresholds are exceeded. When the price begins to increase rapidly in this way, the relative strength index reaches overbought levels. While this sounds like a negative for a recovering asset, bitcoin and other cryptocurrencies can remain overbought for extended periods during stronger trends.
The daily RSI has entered overbought territory, followed by the 3-day. Once the weekly RSI also reaches overbought, there will be nothing to stop the bull run. The last time it happened, the leading cryptocurrency rose for almost 90 days straight without a significant correction.
<img decoding="async" class="aligncenter wp-image-261093 size-large" src="https://technicalterrence.com/wp-content/uploads/2023/10/Is-Bitcoin-trend-starting-its-most-bullish-phase.png" alt="bullish bitcoin price daily” width=”980″ height=”574″ srcset=”https://technicalterrence.com/wp-content/uploads/2023/10/Is-Bitcoin-trend-starting-its-most-bullish-phase.png 980w, https://bitcoinist.com/wp-content/uploads/2023/10/BTCUSD_2023-10-23_11-39-02-640×375.png 640w, https://bitcoinist.com/wp-content/uploads/2023/10/BTCUSD_2023-10-23_11-39-02-768×450.png 768w, https://bitcoinist.com/wp-content/uploads/2023/10/BTCUSD_2023-10-23_11-39-02-1536×899.png 1536w, https://bitcoinist.com/wp-content/uploads/2023/10/BTCUSD_2023-10-23_11-39-02-2048×1199.png 2048w, https://bitcoinist.com/wp-content/uploads/2023/10/BTCUSD_2023-10-23_11-39-02-750×439.png 750w, https://bitcoinist.com/wp-content/uploads/2023/10/BTCUSD_2023-10-23_11-39-02-1140×667.png 1140w” sizes=”(max-width: 980px) 100vw, 980px”/>
Today (left) versus 2020 (right) | BTCUSD on TradingView.com
Trading in the most bullish phase of the trend
Other evidence that bitcoin is approaching or already beginning its momentum phase can be found using the Elliott Wave Principle. BTCUSD is potentially entering its third wave, which is always impulsive in nature. Momentums cause market participants to act and buy or sell the asset. Since bitcoin is in an uptrend, the momentum phase would advance along with it.
A possible third wave would possibly be confirmed with a brief break above the current 2023 high. Falling below the June 2023 low would invalidate the currently bullish price pattern.
If bitcoin is truly entering a momentum phase, then there won’t be many pullbacks similar to how the price behaved at the end of 2020. BTCUSD essentially went from $13,000 to $42,000 unfazed.
This graphic originally appeared in the CoinChartist VIP Issue #25: Impulsive Behavior. The question delves into impulsive price action with a simple strategy on how to go long during the breakout. Subscribe to free.
