2023-10-24 00:00 |
You might not realize it yet, but Bitcoin price could be in a bull market, on the cusp of a major breakout into its most bullish phase yet.
Bitcoin Could Get Impulsive If 2023 High Is BrokenBitcoin price is back above $31,000 after spending more than a year in the $20,000 range. A higher high above the current 2023 record – which is less than $1,000 away at this point – could send the top cryptocurrency into overdrive.
If price action marches higher from here, there’s a strong chance that BTCUSD has entered what’s called an impulse phase. An impulse phase is the most bullish (or bearish) point of any trend, just before things begin to accelerate.
This only occurs when certain psychological price thresholds are surpassed. When price begins to rapidly increase in this manner, it caused the Relative Strength Index to reach overbought levels. While this sounds like a negative thing for a rallying asset, Bitcoin and other cryptocurrencies can remain overbought for extended periods during the strongest trends.
The daily RSI has pushed into overbought territory, with the 3-day right behind it. Once the weekly RSI also reaches overbought, there won’t be any stopping the bull run. The last time the occurred, the top cryptocurrency surged for almost 90 days straight without a significant correction.
Trading The Most Bullish Phase Of The TrendOther evidence that Bitcoin is nearing or already beginning its impulse phase can be found using Elliott Wave Principle. BTCUSD is potentially entering its third wave, which is always impulse in nature. Impulses cause market participants to take action and buy or sell the asset. Since Bitcoin is in a bullish trend, the impulse phase would move up along with it.
A potential third wave would be possibly confirmed with a concise break above the current 2023 high. Falling below the June 2023 low would invalidated the currently bullish leaning price pattern.
If Bitcoin is indeed entering an impulse phase, then there won’t be very many pullbacks similar to how price behaved in late 2020. BTCUSD essentially cruised from $13,000 to $42,000 without flinching.
This chart was originally featured in the issue #25 of CoinChartist VIP: Impulsive Behavior. The issue dives deeper into the impulsive price action with a simple strategy on how to go long during the breakout. Subscribe for free.
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