Bitcoin Shows Strong Fractal Signal: What to Expect Next

Summary: Crypto analyst Merlijn has indicated that Bitcoin has developed a highly significant fractal pattern in the market, correlating its current movements with historical trends seen in gold. Despite ongoing geopolitical tensions, Bitcoin's recent surge to $75,000 highlights its bullish potential and market resilience.

Key Takeaways

Bitcoin has formed a notable fractal pattern similar to one seen in gold in 1974.
The crucial support level for Bitcoin is $62,000, with a potential target of $226,000 if this level is maintained.
A bullish outlook is supported by expanding global liquidity and Bitcoin's current position in the accumulation zone.
Market conditions indicate stabilization and a return of aggressive buying pressure, alongside a modest rise in futures interest.

Bitcoin's Promising Fractal Pattern

Crypto analyst Merlijn has shared insights suggesting that Bitcoin is exhibiting the strongest fractal pattern in today’s market. He pointed out that this formation resembles one seen in gold back in 1974, which included three waves followed by a Fibonacci extension and a parabolic increase. Currently, Bitcoin is replicating this structure, with the third phase unfolding.

According to Merlijn, maintaining the support level at $62,000 is crucial, as it is the last barrier before the Fibonacci extension could take effect—potentially leading Bitcoin to a target of $226,000. Conversely, if Bitcoin falls below this level, it may indicate another dip before it begins to rally. The analyst further noted that Bitcoin seems poised for a similar parabolic movement as gold experienced.

In another post on X, Merlijn expressed a bullish perspective on Bitcoin, emphasizing the importance of global liquidity. He observed that M2 money supply is on the rise again, and that Bitcoin is entering a favorable accumulation zone. Historically, each time this scenario has occurred, Bitcoin has seen significant gains. He highlighted that sustaining a price above $74,000 would confirm this liquidity cycle, while a drop below $65,000 could mean an additional period of consolidation before a surge upwards.

Bitcoin’s price climbed to $75,000 yesterday, showing signs of bullish momentum despite ongoing conflicts between the U.S. and Iran. Experienced trader Peter Brandt suggested that Bitcoin might exceed $80,000 in the near future.

Bitcoin
Source: Chart from Peter Brandt on X

Signs of Market Stabilization and Recovery

According to a research report from on-chain analytics platform Glassnode, the current market conditions are beginning to show signs of stabilization and a gradual recovery. They noted a decisive positive shift in the spot Cumulative Volume Delta (CVD), indicating a resurgence of aggressive buying behavior. Additionally, engagement in the derivatives markets is rising, albeit cautiously.

Glassnode also mentioned that futures open interest has seen an uptick as futures CVD increased, while funding payments have dipped further into negative territory, indicating a strong presence of short sellers. Meanwhile, there is renewed interest in Bitcoin ETFs, although the overall trading volume has cooled slightly from previous highs.

Lastly, Glassnode pointed out that on-chain activity remains somewhat subdued, with active addresses decreasing below their lower thresholds and transfer volumes only improving modestly. Fee volumes have stabilized, reflecting consistent but low levels of network activity.

As of this writing, Bitcoin's price is trading around $74,100, showing a rise over the past 24 hours, according to CoinMarketCap data.

Bitcoin
BTC trading at $74,337 on the 1D chart | Source: BTCUSDT on Tradingview.com