Bitcoin targets $100,000 as price breaks out of 'bullish pennant'

The price of Bitcoin (BTC) has broken out of a traditionally bullish structure and looks on track to reach $100,000.

Known as a "bullish pennant," this structure represents periods of price consolidation and converging trendlines that form after a strong move higher. It eventually prompts a price breakout in the direction of the previous trend, eventually reaching a level that is often as high as the initial large swing size.

On Bitcoin’s weekly chart, the cryptocurrency appears to have been trending within a similar consolidation structure, with its price oscillating within a triangle-like formation after a strong move higher.

Last week, Bitcoin rallied 13.5%, breaking above the structure’s upward trendline, and trading volumes rose along with it. Therefore, Bitcoin's breakout shows that it has the potential to grow at the size of the previous trend (nearly $50,000).

Measured from the breakout point (around $48,200), the bullish pennant's upside target is thus $50,000 higher, or nearly $100,000.

other predictions

Technical trends value Bitcoin at $100,000 after many analysts predicted a six-figure valuation for Bitcoin.

A research team led by Geoffrey Kendrick, global head of global emerging market currency research at Standard Chartered Bank, predicts that BTC will reach $100,000 by early next year. They point to Bitcoin’s potential to become “the primary peer-to-peer payment method for the unbanked around the world” as the reason for their bullish forecast.

David Gokhshtein, founder of Gokhshtein Media and PAC Global, also imagines Bitcoin surpassing $100,000 by the end of 2021. The executive’s bullish outlook for bitcoin is based on the fiat liquidity available in the market, which, according to him, has prompted major players on Wall Street to buy bitcoin.

"Not everyone will publicly tell you they're buying bitcoin, but they are," Gokhshtein told Business Insider.

"There's too much money in the market. There's too much money. Institutions aren't here to play for five minutes."

His statement came after George Soros' investment firm revealed at a Bloomberg event that it owns bitcoin, sending the cryptocurrency's price soaring. On the heels of that, a new report from JPMorgan showed that institutional investors prefer Bitcoin as an inflation hedge over gold.

In an early research report published in May, JPMorgan predicted that Bitcoin would reach $140,000 in the long-term.

holding sentiment on the rise

On-chain metrics highlight rising holding sentiment among Bitcoin traders.

In detail, bitcoin reserves held by all cryptocurrency exchanges recently fell to their lowest level in a year, according to data provided by blockchain analytics firm CryptoQuant. This drop illustrates traders’ preference to hold Bitcoin tokens instead of trading them for other fiat/digital assets.

Therefore, a decrease in bitcoin balances on exchanges is usually accompanied by an increase in the price of bitcoin.