Key Points
- Bitcoin’s price could consolidate for 4 to 5 months, according to Capriole Investments founder Charles Edwards.
- Edwards likens Bitcoin’s price action to gold and suggests a possible “cup and handle” pattern, often followed by strong price appreciation.
Capriole Investments founder Charles Edwards has suggested that Bitcoin’s price might stabilize for the next 4 to 5 months.
This projection is based on the current trends in the stock and crypto markets, and Bitcoin’s on-chain data.
Bitcoin and Gold: A Comparative Analysis
Edwards highlighted that Bitcoin has been fluctuating within the cycle range highs of $58,000 to $65,000.
He also pointed out that Bitcoin’s price action is similar to gold’s, which has shown a “massive cup and handle” pattern over the past 13 years.
Given these similarities, Edwards believes that Bitcoin could spend up to 9 months in the range high, forming a cup before a significant upward movement.
According to Edwards, “The longer we spend in the range highs, the more likely this structure will merge into a classic ‘cup and handle’ pattern, which would typically see strong price appreciation following.”
Bitcoin Metrics and Predictions
Despite the optimism about the cup and handle pattern, Edwards noticed that Bitcoin’s Supply Delta and 90-Day Coin Days Destroyed (CDD) metrics had formed rounded tops.
These metrics are used by Capriole Investments to identify cycle tops, suggesting that we are currently in a mid-cycle pause.
Edwards also noted that the Capriole Bitcoin Macro Index, an indicator that combines over 50 of the most influential Bitcoin on-chain and macro market metrics, shows that Bitcoin “continues to be risk off.”
Risk-off refers to a market sentiment where investors reduce their risk exposure and focus on protecting their capital.
However, despite this, the report suggests that “most of the other metrics still suggest this cycle has quite some room to run.”
Investment management firm ARK Invest supported Edward’s views, agreeing that Bitcoin is still bullish.
ARK Invest analysts demonstrated that previous halving events set the stage for long-term momentum for Bitcoin.
If the halving cycle plays out as expected, Bitcoin’s price could enter a parabolic uptrend, reaching between the $180,000 and $200,00 price range if it sees a 3X increase in BTC price.