Crypto trader Kevin Svenson believes Bitcoin (BTC) will approach $100,000 after this week’s market-wide fall.
Svenson tells According to its 79,000 YouTube subscribers, 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 increasing.
Says Svenson,
“We’ve actually hit a slightly higher low in the RSI – you could also call it flat support, horizontal support. And after that flat support, we had lower price declines. That’s a bullish divergence.
And so what happens on the Bitcoin chart? What we see is a kind of broadening pattern: lower highs, but even lower lows.”
A widening pattern is a technical formation that can be seen as a bullish continuation pattern if the asset manages to clear its diagonal resistance.
Svenson says Bitcoin could rise 60% from current levels if BTC rises above the pattern’s resistance around $68,000.
“Starting from the lowest [of around $49,000] to the potential outbreak zone [at around $68,000] and then you look for a target that actually takes us towards $97,000. So that is the purpose of this pattern.”
Bitcoin is trading at $60,555 at the time of writing.
Using the Fibonacci extension tool, the analyst says that $88,000 and $113,000 are the two other targets he has in his sights – representing a potential gain of 45% and 86% respectively.
On when Bitcoin could reach its price targets, Svenson says:
“Let’s not get ahead of ourselves; It will take some time for this to fully play out. The price may eventually, you know, end up in this range [between $49,000 and $70,000]chopping around for a while before you get the breakout. That outbreak could happen in September.”
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Generated image: Midjourney
