Bitcoin May Ignite Parabolic Impulse or Face Correction, Says Veteran Trader Dave the Wave
Veteran trader Dave the Wave believes that Bitcoin (BTC) is standing at a crucial turning point, where it could either experience a parabolic impulse to the upside or undergo a significant correction. The pseudonymous analyst recently shared his insights on social media, stating that Bitcoin has the potential to make a breakthrough towards $65,000, but also warns of a possible drop to $41,000 if the attempt fails.
According to Dave the Wave's analysis, Bitcoin just broke out of a long-term regression band and is poised to break out of a shorter-term overlapping ascending channel. If the breakout fails, the analyst's downside target of $41,000 aligns with the bottom of the ascending channel.
To determine whether BTC is about to go parabolic, Dave the Wave looks closely at Bitcoin's moving average convergence divergence (MACD). The MACD is a momentum indicator that indicates when trends are about to reverse or start. The veteran trader suggests that when the MACD crosses above a specific level, Bitcoin usually experiences an upward impulse before eventually exhausting itself, similar to what happened in January 2021 and December 2017.
At present, Bitcoin's MACD is approximately a week away from potentially entering what Dave the Wave refers to as the "parabolic strength" zone.
"The daily BTC MACD is a clue.
The difference between technical and parabolic strength."
As of the time of writing, Bitcoin is trading at $51,662, leaving the cryptocurrency community eagerly watching to see which direction it will take next.
Analyst comment
As an analyst, I would say that the news is neutral. The market’s reaction will depend on whether Bitcoin can break out of the channel and reach the target of $65,000 or if it fails and drops to $41,000. The MACD indicator will provide further insight, potentially indicating a parabolic move if it crosses a certain level. In the short term, Bitcoin’s price will likely be influenced by these technical factors.
