Is The Crash Over? The "Micro" Signal Calling for $85k Bitcoin

Bitcoin & Crypto Chart Analysis - Gareth Soloway (Verified Investing)

Key Concepts:

• Micro vs. Macro Analysis: Examining short-term (micro) patterns within the context of long-term (macro) trends.
• Bullish Patterns: Chart formations suggesting potential price increases (e.g., bull flags, inside bar consolidation).
• Resistance & Support Levels: Price points where an asset historically struggles to move beyond (resistance) or falls below (support).
• Head and Shoulders Pattern: A bearish chart pattern indicating a potential trend reversal.
• Inside Bar: A candlestick pattern where the current candle's high and low are within the previous candle's high and low, suggesting consolidation.
• Bull Flag: A continuation pattern formed after a strong upward move, characterized by a "flagpole" and a consolidating "flag."
• Dollar-Cost Averaging (DCA): Investing a fixed amount of money at regular intervals, regardless of price.
• Sentiment Analysis: Gauging the overall attitude of investors towards an asset.

I. Bitcoin – Near-Term Bullish Bias & Resistance Levels

Gareth Soloway identifies a near-term bullish pattern in Bitcoin, characterized by an “inside bar” consolidation following an initial upward move. This pattern suggests a high probability of a further move to the upside. He emphasizes the importance of focusing on short-term patterns (micro analysis) while remaining aware of the broader, long-term trends (macro analysis).

Specifically, he points to a recent green candle followed by a period of “chopping” (consolidation) as indicative of this bullish momentum. This consolidation can be visualized as a “bull flag” pattern, with the initial upward move acting as the “flagpole” and the consolidation as the “flag” itself.

However, Soloway stresses the need for realistic expectations. He cautions against overly optimistic price predictions (e.g., $250,000 or $1 million) and emphasizes the importance of grounding analysis in chart patterns. He states, “Charts are reality because they have no bias. A chart is a chart, it has no bias, it has no narratives. It just is what it is.”

The primary resistance level to watch is the consolidation zone formed after the previous major downward move. Breaking above this zone could trigger a “relief rally” to around $80,000, potentially reaching $85,000. He highlights that resistance should be treated as a “brick wall” until definitively broken.

II. Historical Context & Weekly Chart Analysis

Soloway draws a parallel to the 2017-2021 bull market cycle, where Bitcoin repeatedly tested the 2017 high as resistance. He accurately predicted a breakdown below this level in October, demonstrating the predictive power of chart analysis. He describes this resistance as a “cage” for Bitcoin, stating, “unless Bitcoin can break through this, then we have to assume the path of least resistance is which way? It would be to the downside.”

He notes the recurring pattern of downward moves followed by inside bar consolidation, which is currently forming on the daily chart, mirroring the pattern observed on the weekly chart. He emphasizes that chart patterns are probabilistic, not deterministic, with a roughly 70% chance of playing out as expected, leaving a 30% possibility of a reversal.

III. Risk Management & The Head and Shoulders Pattern

Soloway advises traders to use tight stop-loss orders, placing them just below the low of the “flagpole” to mitigate risk. He explains that a break below the flagpole’s low would signal a failure of the bullish pattern.

He also acknowledges the presence of a larger “head and shoulders” pattern on the charts, a bearish formation that, if completed, could lead to a decline to $35,000. However, he doesn’t advocate waiting for this scenario to begin buying, instead employing a strategy of “nibbling” – gradually building a core position over time. He explains this approach: “I pick up one Bitcoin here. If it drops another 10,000, maybe two Bitcoin. If it drops another 10,000, maybe three Bitcoin…The idea is I'm very open to just building a core position.”

He believes Bitcoin still has long-term potential as a “digital gold” currency, despite its current volatility, acknowledging its relative immaturity compared to gold, which has been a store of value for millennia. He stresses the importance of diversification, stating that a good investor doesn’t allocate all their capital to a single asset.

IV. Altcoin Analysis: ETH, Solana, & XRP

• Ethereum (ETH): ETH is also experiencing a bounce, but Soloway emphasizes the need to break and hold above the $2100 level to confirm bullish momentum. A successful breakout could lead to a rally towards $2600. He also notes potential longer-term support around the 1500-1600 level.
• Solana (SOL): Solana is displaying a bullish “bottoming tail” candlestick pattern and an inside bar formation, suggesting a potential move back towards $120.
• XRP: XRP recently broke a significant support level, but is now showing a reversal inside bar, indicating a possible move back into the 160-175 range, which will likely act as resistance.

V. Sentiment & Overall Market Outlook

Soloway notes that current market sentiment is “ugly,” which he views as a bullish contrarian indicator, suggesting a potential “relief rally.” He concludes that most altcoins and Bitcoin are currently bullish in the short term, but acknowledges that charts can fail and that technical analysis is probabilistic. He reiterates, “Anything has a probability in technical analysis of failing, but the odds right now favor further upside.”

Data & Statistics:

• 70% probability: The estimated success rate of a bull flag pattern.
• 30% probability: The estimated chance of a reversal or breakdown in a bull flag pattern.
• $80,000 - $85,000: Potential near-term price target for Bitcoin if it breaks resistance.
• $2600: Potential price target for Ethereum if it breaks the $2100 resistance.
• $120: Potential price target for Solana.
• $160 - $175: Potential resistance range for XRP.

Conclusion:

Gareth Soloway presents a cautiously optimistic outlook for Bitcoin and the broader cryptocurrency market, based on short-term chart patterns. While acknowledging the presence of longer-term bearish formations, he emphasizes the potential for near-term gains, particularly if key resistance levels are broken. He stresses the importance of risk management, realistic expectations, and a diversified investment approach. His analysis highlights the value of technical analysis as a tool for understanding market probabilities, while also recognizing its inherent limitations.