Bitcoin bulls eye record highs - but we could see some ‘chop at the top’

Bitcoin is the kind of market that can make a mockery of traditional technical analysis terms such as ‘overbought’ and ‘oversold’. When it rallies, it can do so at such pace that you’d be forgiven for having a sore neck and squinted eyes trying to watch it. And at ~42% up for the month of February, Bitcoin is clearly within its latest parabolic-bull phase of the cycle. But with it fast approaching its record high, how much fuel is left in this rally’s tank?

Bitcoin technical analysis (monthly chart):

The rally from the 2022 low is picking up pace, although prices have retreated yesterday and are now clinging to the monthly0close ATH and remains outside the upper Keltner band.

But perhaps the more striking observation is that Bitcoin is on track for its most bullish month since December 2020, and that month was relatively early within its own parabolic trend. If this means Bitcoin is ‘just warming up’, the it becomes difficult to fathom just how high it could fly.

With that said it is also worth noting that the $60-$70k region prompted sharp reversals from record highs and subsequent bear trends. And as prices are now clinging to the previous monthly-close ATH, it suggests markets are watching these key levels.

Bitcoin technical analysis (weekly chart):

The parabolic nature of Bitcoin is best seen on the weekly chart, and the current rally is likely more comparable to the runup seen in the first half of 2021. And if this rally is to play out in a similar fashion, it suggests volatility over the coming weeks could follow before prices fall. And regardless of whether we then see Bitcoin enter a multi-month bear trend or simply break to new highs seems irrelevant for traders looking to enter today. As my bias is that one-way volatility may become a thing of the past, and that we may be about to enter a period of 2-way volatile shakeouts.

Bitcoin technical analysis (daily chart):

If this were any other market, it would likely be in the 'blow-off top - don't go near that bubble' category. But Bitcoin is back in its parabolic-rally phase, with no immediate signs of a top on the daily chart. Volumes are high heading into the highs with a positive delta (positive buying volume).

Given Bitcoin’s parabolic nature, it does look as though it at least wants another crack at the ATH (weekly close) or actual ATH. However, resistance levels and record highs are levels which tend to tempt ‘weaker hands’ book profits. SO I would not be surprised to see a volatile shakeout around 65.5k and 69k, given their historic significance. Yet as the daily trend remains bullish above the 50.5k low, any pullback towards it – however volatile – could be seen as a gift to bullish-crypto fans who clearly want to drive this to a record high.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.