Bitcoin’s (BTC) price may climb by more than 50% in September, a month otherwise considered ominous for the cryptocurrency due to its poor historical returns.
BTC price double-bottom and then to $30K?
The conflicting upside signal comes from a potential double-bottom pattern on Bitcoin’s longer-timeframe charts against the United States dollar. Double-bottoms are bullish reversal patterns that resemble the letter W due to two lows and a change in direction from downside to upside.
Bitcoin’s decline below $20,000 in July, followed by a sharp recovery toward $25,000 and a subsequent return to the $20,000 level in August, partially confirms the double-bottom scenario. The cryptocurrency would complete the pattern after rebounding toward $25,000.
A W-shaped price move in an ideal scenario could be followed by another sharp move higher — a double-bottom breakout.
Meanwhile, a double-bottom’s upside target is found after measuring the distance between the pattern’s peak (neckline) and lowest levels and adding the outcome to the breakout point, as illustrated below. In other words, a potential 50% price rally.
As a note of caution, double-bottom setups carry a small degree of failure risks, about 21.45%, according to Samurai Trading Academy’s study of popular charting patterns.
Market slips back into “extreme fear“
Bitcoins bullish reversal scenario occurs amid general price depreciation across the risk-on markets.