Bitcoin Price Poised For 'Explosive Movement': Here's Why

Bitcoin appears to be on the cusp of an "explosive movement" based on technical and on-chain factors, coupled with warming fundamentals.

Bitcoin closed Monday at $19,272, its second day above $19,000 after breaking this support five days ago. Even so, the market has been essentially drifting sideways after the dominant cryptocurrency peaked on Nov. 30. According to FX Street, Bitcoin is yet to break hurdles, particularly the one at $19,500.

At the time of this writing, bulls made an attempt to recapture the $19,500 level only to be met with strong selling pressure. Bitcoin currently trades at $19,128.

The current uptrend really began in March, after the crash that put the price of Bitcoin below $3,000. Since then, the long-term chart of the benchmark cryptocurrency has really been a series of higher highs and higher lows. A rising wedge pattern has been observed at just below $19,500, which means any breakout could lead potentially to $21,200, FX Street reported.

Still, this outlook could be invalidated if the wedge formation is broken. The support this time is lower, at $16,000.

Another major issue is the gap that appeared in the Chicago Mercantile Exchange (CME) between $18,100 and $19,000. Analysts expect the $1,000 gap would be refilled eventually. Filling this gap would mean a major move below $19,000, which is not what the bulls expect.

Additionally, analysts noted another outstanding gap in the CME chart last month, which was around the $17,000 zone. Filling the gap would potentially lead to a revisit to $16,000, the next major support.

Still, analysts are only bearish for the short-term as the majority of them are positive on the upsurge of the Bitcoin price in 2021. Rafael Schultze-Kraft, chief technical officer at Glassnode, said multiple on-chain metrics are suggesting that the benchmark cryptocurrency might reach a six-figure price in the future. These metrics are in a similar position as they were just before the bull run of 2017.

For example, the "Reserve Risk" metric, which measures the confidence of long-term holders relative to the Bitcoin price, is currently 11% from the 2017 top. This suggests a similar move could move Bitcoin upward to $240,000.