Bitcoin price may be under $10,000 for days now, but bears have still yet to push the price per BTC to new local lows and breakthrough support in the mid to low $9,000 range.
If the support continues to hold, so will the bottom of what appears to be a Livermore Accumulation Cylinder that could next be targeting a new all-time high in Bitcoin price in the days ahead.
Bitcoin Is In Legendary Trader’s Favorite Pattern: Livermore Accumulation Cylinder
While Bitcoin’s bullish parabolic advance was rejected at $13,800, the leading crypto asset by market cap has spent the last few months consolidating before it finally chooses the next short term direction.
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And while the market is currently bearish on Bitcoin after repeated bounces below $10,000 failed to lead to a sustainable rally, if this support continues to hold, the next stop could be a new all-time high once Bitcoin price breaks out of the current consolidation range.
According to Adaptive Fund analyst Adam Taché, Bitcoin price is actually ranging inside a Livermore Accumulation Cylinder. The Livermore Accumulation Cylinder was popularized by Massachusetts-born American investor Jesse Lauriston Livermore – who was known to be one of the greatest traders to ever live.
Livermore’s theory involved what is more commonly defined as an ascending broadening wedge, that takes place over larger time periods. Inside this upward-sloping broadening wedge, strong accumulation takes place at key supports, and each support is used to propel the price of the asset higher and higher. At the end of the structure, there is an extremely powerful breakout to the upside, which could once again cause Bitcoin price to go parabolic.
The theory suggests that not only will this happen, but a new all-time high is the next stop in the pattern. If the pattern is indeed valid Bitcoin price will reach around $25,000 next, before falling back down to the top of the current trading range at around $12,000 to confirm is as resistance turned support.
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After that, well, Taché will need to expand on his chart as it is running out of headroom for Bitcoin to stretch its arms out to.
Taché is well respected in the crypto community, and the analyst is responsible for the Bitcoin Rabbit Hole – a collection of important Bitcoin-related reading material and reference guides, personally curated by Taché.
It’s worth noting that Livermore’s favorite short set up, according to career trader, Peter Brandt, was to short the blow-off top that occurs after a Livermore Accumulation Cylinder plays out. If the Livermore Accumulation Cylinder does indeed play out, a short of the blow-off top could be among the most lucrative trades ever, given how hard Bitcoin falls once it starts to.