Cryptocurrencies

According to Capriole Investments founder Charles Edwards, stock market seasonality indicates…

According to Capriole Investments founder, Charles Edwards, the seasonality of the stock market and cryptocurrencies, coupled with Bitcoin blockchain data, suggests that the BTC price could consolidate for 4 to 5 months.

In a new report, Edwards said that Bitcoin continues to fluctuate within the cycle highs in the $58,000 to $65,000 region, with a sustained weekly close above $58,000 “supportive of the continuation of the long-term trend.”

Likening Bitcoin’s price action to gold, which has formed a “huge cup and handle” pattern over the past 13 years, with the “cup” lasting four years, Edwards pointed out how Bitcoin appears to be showing the same chart pattern.

Edwards noted that given the similarities between Bitcoin and gold, there is a possibility that Bitcoin could spend “up to nine months in the high range forming a cup before a measured upward move.”

Edwards said,

“The technical picture remains bullish, provided the price remains above $58,000. “The more time we spend in the high range, the more likely this structure will merge into a classic ‘cup and handle’ pattern, which usually sees a strong price rally afterwards.”

BTC/USD weekly chart. source: TradingView

Despite the promise of a cup-and-handle pattern, Edwards noted that Bitcoin supply deltas and the coin’s 90-day demolition (CDD) metrics have formed rounded tops. Edwards explained that Capriole Investments uses both to identify cycle tops, and that “we are at a similar stopping point in the middle of the cycle.”

“Regardless, this chart tells us to expect at least a few months (and perhaps up to 6 months) of sideways swings and volatility before the trend resumes. We have reached the two-month mark today.”

According To Capriole Investments Founder Charles Edwards, Stock Market Seasonality Indicates...
Bitcoin and CDD 90-day supply delta. Source: Capriol Investments

Edwards also said he was closely monitoring the Capriol Bitcoin Macro Index, an index that compiles more than 50 of Bitcoin’s strongest on-chain and macro market metrics that reveal that Bitcoin is “still far from risky.”

According To Capriole Investments Founder Charles Edwards, Stock Market Seasonality Indicates...
Bitcoin Macro Indicator. Source: Capriole Investments

Risk aversion describes market sentiment in which investors reduce their exposure to risk and focus on protecting their capital.

However, the report noted that “most other metrics still indicate that this cycle has significant room to run.”

Related: Bitcoin Analysis Sees $74K Next as BTC Price Tries to Hold 7.5% Gains

Investment management firm ARK Invest backed Edward’s views, agreeing that Bitcoin remains bullish. ARK Invest analysts showed that the previous halving events set the stage for long-term momentum for BTC.

The report noted that each halving served as a “prelude to upward momentum over a longer-term time horizon,” adding,

“Assuming a 3x increase in the price of Bitcoin after a year of halving this time may be too optimistic. However, this chart highlights Bitcoin’s increasing scarcity over a large time horizon.

According To Capriole Investments Founder Charles Edwards, Stock Market Seasonality Indicates...
BTC performance since the halving day. Source: Ark Invest

If the halving cycle goes as expected, Bitcoin price could enter a parabolic uptrend, crossing the price range between $180,000 and $200,000 if it achieves a 3x increase in Bitcoin price.

This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.

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