Exploring Bitcoin’s potential top from a technical analysis perspective. In addition to the K-line pattern, we will also use the Fibonacci extension ratio, that is, the theory of AB=CD. Pulling up from the starting point of the previous bull market to a 1:1 extension ratio, we can see that the top is approximately $81,000. Therefore, there is a technical basis for many people to believe that the price of Bitcoin will rise to $80,000. In addition, if the current pattern is a consolidating head and shoulders bottom pattern, using a 1:1 box breakout extension, we will find that $81,380 is exactly the same as the Fibonacci extension ratio, which is worthy of our attention.
But I will also look at the weekly close for the coming week. If Bitcoin continues to rise, I would expect it to maintain its current trend. Historically, if there is a long lead at the weekly level after breaking through a new high, there will usually be consolidation for about two weeks, and then continue to rise. However, it should be noted that if a false breakthrough occurs, it may be a signal that medium and long-term investors need to be wary of. According to Bitcoin’s Greed and Fear Index, once an extreme level of greed is reached, the market will tend to retrace if it lasts for about 40 days. Currently, Bitcoin has been in a state of extreme greed for about 30 days, so Bitcoin may continue to rise in the future, but if there is a peak retracement at the weekly level, you need to be careful about a possible market correction.