Crypto analyst TechDev (@TechDev_52) recently shared detailed graphical analysis suggesting that Bitcoin could be on the verge of its most significant breakout to date. This analysis, supported by historical patterns and technical indicators, points to a potential shift in the market that could lead to unprecedented price levels for Bitcoin.
O graphic provided by TechDev illustrates Bitcoin’s price action in US dollars along with its price relative to the M1 money supply (BTC/M1). Historically, Bitcoin has exhibited distinct phases of parabolic price increases, known as “burst tops,” followed by sharp corrections. These burst peaks are marked with green checkmarks on the chart, occurring in 2011, 2013, and 2017. Each of these peaks was followed by significant corrections.
Notably, the 2021 peak did not result in an explosive top, as indicated by the red cross on the chart. This deviation from historical patterns is significant because it suggests a possible change in market behavior.
The TechDev chart also highlights a key pattern known as the “right-angled downward broadening formation.” This technical pattern is characterized by a series of lower highs and lower bass, creating an increasingly broad wedge shape. The pattern typically signals a period of consolidation, where the price oscillates within broad trend lines before a decisive breakout. The chart shows that Bitcoin has recently broken out of this widening wedge, indicating a potential shift from a consolidation phase to a new uptrend.
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The analyst commented: “Significant. Bitcoin only saw burst spikes after breakouts against M1 money stock. And the longer it is consolidated, the longer it will run. This breakout follows the longest consolidation to date. In fact, it represents a classic breakout of a 5-year widening wedge. The last 5 years have been corrective against M1. BTC is once again bullish against it for the first time since 2017. We have never seen a Bitcoin breakout like this.”
Bitcoin Could Outperform 2021 Cycle
Another critical aspect of TechDev’s analysis is Bitcoin’s breakout against the M1 money supply. The M1 money supply includes physical currency and demand deposits, representing the most liquid forms of money in the economy. TechDev points out that Bitcoin has broken out against M1 for the first time since March 2017. This breakout is particularly significant because it suggests that Bitcoin’s recent price rise is driven by intrinsic demand, rather than just an increase in money supply.
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TechDev comments on this breakout, stating: “You are looking at Bitcoin’s first breakout from the M1 money supply since March 2017 when it was historically parabolic for 9 months. Comparisons and projections of trends involving 2021 can end up drastically underestimating things. One interpretation: In 2021, BTC was driven to new highs by the dollar due to the increase in money supply. In 2024, it got there on its own demand (and therefore broke out against M1). Add the predicted M1 growth this time and we will likely see BTC exceed expectations based in part on 2021.”
TechDev’s analysis highlights the importance of understanding Bitcoin’s performance relative to macroeconomic indicators like the M1 money supply. By breaking out of M1, Bitcoin demonstrates strong intrinsic demand, which is a bullish signal for future price movements. Historical patterns of explosive tops following similar breakouts suggest that Bitcoin may be entering a new phase of price discovery, potentially leading to new all-time highs.
At press time, BTC traded at $69,032.
Featured image created with DALL·E, chart from TradingView.com