Bitcoin’s current price structure is leading analysts to reconsider how this cycle is unfolding. Looking back at historical patterns, a technical analysis suggests that Bitcoin’s current trajectory resembles the gradual buildup seen in 2017.
A detailed long-term chart utilizing a linear regression channel indicates that Bitcoin may still be in a preparatory phase, with a significant technical obstacle standing between the current consolidation phase and a potential powerful rally.
The Linear Regression Line Holding Back The Breakout
Analyzing Bitcoin’s price action through a linear regression model, crypto analyst CW’s chart highlights the cryptocurrency’s price movement within clear support and resistance boundaries spanning over a decade. Notably, Bitcoin’s most significant bullish phases historically began after breaking convincingly above the regression trendline.
During the 2017 cycle, Bitcoin spent an extended period consolidating below this line before eventually breaking through. This breakout led to a strong year-long rally, propelling BTC from below $1,000 to nearly $20,000 within a relatively short timeframe.
In contrast, the 2021 cycle exhibited a different pattern, with Bitcoin’s price action accelerating earlier in the cycle, surpassing trend resistance sooner and reaching a peak of $69,000 without the prolonged base formation seen in 2017.
Presently, the chart indicates that the current cycle has yet to make a decisive breakthrough above the linear regression fit. Despite Bitcoin achieving a new all-time high above $126,000, the price continues to respect the long-term trendline as a barrier, signaling that the major expansion phase is still pending. The anticipation is that the true rally will commence only after surpassing this barrier convincingly.
Structure Points To A Breakout Setup To $500,000
Based on the linear regression fit, Bitcoin appears to be in an accumulation phase, as indicated by the extended consolidation below the green regression trendline. Currently approaching the red support trendline, the next projection suggests a bounce from this support level.
Throughout various cycles, the red support trendline has consistently served as a floor during pullbacks. Whenever Bitcoin has tested or neared this level, it has corresponded with significant accumulation phases in the past.
If historical trends repeat in a similar fashion to 2017, a breakout above the green linear regression trendline followed by a move towards the purple resistance trendline could propel Bitcoin towards the $500,000 range before encountering the resistance trendline.
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