Assess the possibility of Bitcoin breaking out by the end of the year

On November 16, Bitcoin fell nearly 13%. On December 3, the decline almost doubled (25%). Panic over the subsequent fixes and price consolidation gave way to more stories about whether Bitcoin broke $ 55,000 or slipped below $ 45,000. This remains an important question before the end of the year.

There have been consecutive bullish divergences towards year-end breakouts over the past few months. However, with these bullish structures, BTC has not yet shown any signs of improvement. Expecting a price point of $ 100,000 by the end of the year may be a little over-optimistic at the time of writing, but there is still a chance Bitcoin will rise again.

The divergences important looks good

The bearish bias following remarks by Federal Reserve Chairman Jerome Powell appears to be cooling off as another weekly candle awaits to determine imminent price action.

If you look at the number of wallet addresses pushing BTC to the exchange, you can see that every time more addresses transfer coins to the exchange, this leads to a clear downward trend.

For example, on September 11th, the index rose significantly compared to 4 months ago, resulting in a decrease in volatility.

Bitcoin 1

Source: CryptoQuant

As soon as the number of wallet addresses transferred to the exchange stabilized, Bitcoin started a new upward trend. In the short term, however, it looks like there will be a few more drops left.

Bitcoin’s monthly Chaikin Money Flow (CMF) and its relationship with macro tops suggests that fractals (patterns that repeat themselves now) may soon come into play. Macro tops on CMF charts are often accompanied by cyclical tops before consolidation, as is the case now.

Bitcoin 2

The source: TechDev

So Where Will Bitcoin Price Go??

While Bitcoin’s supply-demand dynamic has been largely bullish this quarter, with the bullish divergence more prominent, BTC could see large moves in the short to medium term.

The Exchange Supply Shock Ratio (which quantifies the total supply of Bitcoin on the exchanges in relation to the total supply of Bitcoins in circulation) is currently well on the way to reaching its largest divergence since November 2020.

Bitcoin 3

Source: CryptoQuant

In June of that year, when that divergence occurred, Bitcoin was up 72%. In September 2021, Bitcoin was up 64%. With the year-end and the holiday season in mind, BTC is more likely to skyrocket if history rhymes.

However, in order for Bitcoin to rise, it is important that the Open Interest (OI) rise relatively higher than the price. At the moment the OI is relatively stable. If it makes any significant move we may be ready for another rally.

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