Bitcoin price in classic 'Bull Pennant' breakout as BTC whales go on buying spree

Published at: Nov. 8, 2021

Bitcoin (BTC) has the potential to rise toward $75,000 by the end of this year as it breaks out of a classic bullish pattern and picks additional upside cues from its richest investors' recent accumulation spree.

Bitcoin Bull Pennant breakout in play

BTC rallied over by 6% in the past 24 hours to reach a three-week high just shy of $66,500. In doing so, the cryptocurrency broke out of a consolidation range consisting of two diverging trendlines, a setup reminiscent of a Bull Pennant.

Bull Pennants are bullish continuation patterns that appear when an instrument consolidates in a Triangle-like price range following a strong move higher (called Flagpole). It typically ends up breaking out of the range to the upside, eyeing a profit target at length equal to the Flagpole's size.

Bitcoin ticks almost all the boxes when it comes to confirming a Bull Pennant breakout. As a result, its likelihood of continuing its upside boom has risen, with its profit target sitting as high as the height of its Flagpole, which is over $12,300, as shown in the chart below.

The bull setup puts the BTC price on the way towards $75,000, after adding the Flagpole height to the point of breakout around $63,300.

Whales enter BTC accumulation spree

Bitcoin's bullish setup received additional confirmation from an on-chain indicator by Santiment that tracks distribution/accumulation activities of the wallets with balances between 10,000 BTC and 100,000 BTC.

The metric highlighted that the so-called "Bitcoin whales" have been accelerating their buying spree.

Specifically, these entities accumulated 43,000 BTC (worth about $2.82 billion) in the last five days and about 92,000 BTC (over $6 billion) in the last 25 days, just as the price rallied to a record high near $67,000, corrected below $60,000, and surged back above $66,000.

The whale-led buying between the $60,000-67,000 area underscored their preparations for the times ahead, i.e. they anticipated Bitcoin to close beyond its previous record high.

Additionally, on-chain analyst Willy Woo noted that Bitcoin continues to move off exchanges to cold storage in recent weeks. At the same time, the deposits of dollar-pegged stablecoin USDC surged in the same period, underlining a classing buying pattern.

"Price was previously overheated, calling for a time of consolidation, since then we've seen significant buying from investors while [the] price has been sideways," wrote Woo in a note to clients, adding:

"It’s been a healthy consolidation. Meanwhile, significant whale activity has been spotted which suggests BTC’s next move in price may come soon."

Bitcoin is up by nearly 50% so in Q4, just 2% under its all-time high of $67,000.

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