The key to predicting bitcoin price movements is in the stars… or at least the triangles, according to economist and crypto analyst Alex Krüger. He’s been busy comparing the ‘great bitcoin triangles’ of 2018 and 2019 using volume profiles, and finding a considerably more robust position today.
Bitcoin Data Speaks Volumes
The triangles Krüger was looking at were overlays of volume profile over bitcoin price, from the point of original breakout. The breakout for the 2018 triangle was towards the end of 2017, before the rally which took us to the current all-time high.
The first thing to note is that the most traded price (or mode), is significantly more in the 2019 triangle. Throughout the previous cycle the most traded price for BTC was $6400, whereas in the current triangle, it is $10,260.
Another crucial difference is the weighting of the volume profile. In the 2018 triangle, the mode price sits roughly along the bottom edge, making a right-angled triangle with a deep abyss below. However the 2019 mode price is closer to the centre of a more symmetrical triangle. This leaves it with relatively more support from below, as volume provides support.
So Which Way Will It Break?
According to Krüger, that entirely depends on our current position.
Biases aside, from a volume profile perspective the probability of price breaking out upwards (downwards) is higher when price is above (below) 10260.
Not great news at time of press.
However, if price does break downwards instead of upwards, Krüger believes a 50% crash is extremely unlikely. With considerably more support (in terms of volume) below, he suggests that somewhere in the $7000s would be a better prediction. And with a high-volume node at $7870, he thinks a run at $8000 would provide a great long opportunity.
Everybody’s Got One
Of course, there are more factors affecting the bitcoin market than previous cycles and volume profiles. Many have hopes that today’s launch of the Bakkt physical futures platform will bring in institutional investors, and with them, higher prices.
Others suggest that lower trading volumes mean a drop into the $7000s is almost inevitable, rather than simply one of a number of possibilities. But then, we’ve been hearing that for weeks, and so far we remain in our $10k range.
What do you make of Kruger’s analysis? Let us know your thoughts in the comment section below!
Images via Shutterstock, Twitter @Alex_Kruger
