Why Bitcoin skyrocketed to $40,000 per coin in an instant

Bitcoin is currently at $24,000 and has only recently retested $20,000. Yet in a matter of weeks, the price of Bitcoin could double to over $40,000 in a split second.

The following is a closer look at past technical combinations that have had near-perfect records marking the start of some of the strongest bull trends in cryptocurrency history.

BTCUSD Signal Return Leads to Explosive Move

Markets are cyclical and history is said to repeat itself. Each cycle of BTCUSD is slightly different, but they all start off with almost the same lightning setup, resulting in an explosive move followed by a sustained rally.

This particular setup involves a combination of the Logarithmic Moving Average Convergence Divergence Indicator (LMACD) and Bollinger Bands on a 3-week time frame.

In the past, this particular setup has always resulted in bitcoin prices at least doubling, or even tripling, within days to weeks. The combination of these two technical tools produces a signal when BTCUSD crosses the midline of the Bollinger Bands, and when the red trigger crosses the dotted midline of LMACD.

This setup is only returning for the fourth time in Bitcoin’s price history, and according to cyclical behavior, time is on its side. Each time the signal confirms that a bottom has been entered and a sharp move higher begins.

Indicator combo about to trigger buy signal | BTCUSD on TradingView.com

Why Bitcoin Price Can Double in Less Than Six Weeks

Every time the signal triggers and BTCUSD closes above the middle line of the Bollinger Bands. This confirmation caused the price to rally towards the ceiling over the next 3-6 weeks, with an average return of 118%.

In 2013, immediately after the signal was triggered, Bitcoin rallied 139% to the upper limit, and then continued to rise by 19,000%.

The second signal in 2015 saw the weakest initial rally with a return of 76% after breaking through the middle line – on the Bollinger Bands, the middle line is the 20-period simple moving average. A broad-based rally resulted in gains of more than 7,000%.

In 2019, BTCUSD rallied another 139%, and then another 1,000% before the bull market faded. Now the signal is back, with the upper Bollinger Bands at roughly $40,000 per BTC, or around double here and the recent retest of $20,000.

Historical data shows that the largest cryptocurrency by market capitalization is quick to see strong moves, initially gaining as much as 118% on average. The average of the subsequent three rallies rounds to roughly 9,000%. Most of the gains happened in the early days of crypto, so don’t expect that big gains. But math is what it is, and while past performance is no guarantee of future results, the odds of an explosive move are much higher once the signal is confirmed.

Information source: compiled from NEWSBTC by 0x information.Copyright belongs to the author, without permission, may not be reproduced

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