Bitcoin (BTC) chart patterns mirror those that preceded the late 2024 rally from $70,000 to $109,000

CoinDesk analyst Omkar Godbole provides a daily technical analysis of the crypto market.

Crypto bears might want to keep a close eye on bitcoin’s (BTC) recent chart patterns, which show striking similarities to those that preceded the late 2024 rally from $70,000 to $109,000.

The first pattern to watch is the weekly chart’s Moving Average Convergence Divergence (MACD) histogram, a momentum indicator used to identify trend changes and reversals. MACD crossovers above or below the zero line typically signal bullish or bearish shifts in momentum.

However, traders prefer to interpret these signals in the context of price action. A bearish crossover, for example, needs validation through weakening prices; otherwise, it could indicate underlying strength and a bear trap. Currently, that seems to be the case with BTC.

The cryptocurrency initially fell after the MACD flipped negative in mid-February, but quickly found support at the 50-week simple moving average (SMA) in March and has since bounced back above $90k. All the while, the MACD has held below zero.

This pattern is strikingly similar to last August and September, when prices held the SMA support despite persistent bearish MACD signals. The indicator finally flipped bullish around mid-October, confirming the trend with a rally from $70K to $100K by December.

The second pattern to keep an eye on is the 50- and 200-day SMAs. About four weeks ago, these averages formed a bearish crossover—commonly known as the death cross—signaling a potential long-term downtrend. However, this scenario turned out to be a bear trap, as bitcoin found support around $75K and reversed course.

Recently, the 50-day SMA has begun to rise again and could soon cross above the 200-day SMA, setting up a bullish golden cross in the coming weeks.

Again, this pattern closely mirrors last year’s trend: the death cross in August marked a bottom, quickly followed by a golden cross that sparked a breakout above $70K and ultimately led to a rally above $109K to new highs.

In other words, bullish volatility might be brewing on the horizon, potentially taking bitcoin past the January high of $109K.

Chart patterns are a common tool for assessing market strength and forecasting future movements. However, it’s crucial to remember that history doesn’t always repeat itself, and macroeconomic factors can quickly swing market directions, rendering chart analysis far from foolproof.