Bitcoin’s Price Sees Potential Rally to $37K as Valkyrie Investments Identifies “Throwback” Pattern
Valkyrie Investments suggests that Bitcoin’s recent price movement forms a notable pattern known as a “throwback,” which could serve as a catalyst for a surge towards the $37,000 mark. This technical analysis term refers to a countertrend reversal where prices retreat to a previous breakout level or support-turned-resistance before witnessing a strong upward momentum.
According to Joshua Olszewicz, the head of research at Valkyrie Investments, Bitcoin’s recent pullback to around $25,000 aligns with the characteristics of a classic throwback pattern. This level coincides with the former inverse head-and-shoulders neckline resistance that was breached and subsequently transformed into a support level back in March. Olszewicz highlights that throwback patterns often lead to a bullish surge, as detailed by Thomas Bulkowski in his book on chart patterns.
In this case, the throwback pattern is further reinforced by a nearly three-month bullish reversal falling wedge chart pattern. Olszewicz emphasizes that the positive resolution of this throwback pattern could potentially set the stage for a pivot-to-pivot trade setup, with the target price range spanning from $25,000 to $37,000.
Examining the chart, it is evident that Bitcoin has recently completed the throwback phase by retesting the green support zone. While some technical analysis references indicate that throwbacks typically last no longer than ten days, the duration is often considered arbitrary.
The throwback pattern is further enhanced by the presence of a falling wedge, which is characterized by converging descending trendlines. Falling wedges are generally seen as bullish reversal patterns, adding to the optimistic outlook for Bitcoin’s price trajectory.
However, Olszewicz cautions that the validity of the throwback and wedge patterns would be compromised if prices drop below the 200-day simple moving average, currently standing at $23,690.
In conclusion, Valkyrie Investments’ analysis highlights the potential for Bitcoin to experience a notable rally to $37,000, driven by the emergence of a throwback pattern and a bullish falling wedge formation.