Recent events in the Bitcoin market suggest a strengthening of the cryptocurrency's position. The bullish engulfing pattern forms after two days of bearish momentum, while high liquidity underscores positive trends.
Bullish Patterns of Bitcoin and Their History
Bitcoin closed Monday with a strong 4.34% daily gain, forming a bullish engulfing candlestick that fully overshadowed the previous two days of bearish price action. This pattern, coupled with BTC maintaining support above the $105,000 level for two consecutive days, signals a potential shift in market structure.
Since 2021, there have been 19 instances of the bullish engulfing pattern on Bitcoin's daily chart, out of which 15 led to the formation of new local highs, translating to a historical success rate of approximately 78%.
BTC Liquidity at Its Peak
The conditions for Bitcoin in the market resemble those observed in late 2022. Despite widespread panic, BTC bottomed at $16,800 and doubled within three months. According to Swissblock, liquidity levels have returned to those seen in December 2022, hinting at a potentially bullish continuation.
Since the cycle low in November 2022, Bitcoin has absorbed over $544 billion in fresh capital, driving its realized market cap to an all-time high of $944 billion.
Market Actions in the Bull Cycles
While the macro environment and market participants have shifted, one fundamental truth remains constant: when liquidity recovers, BTC price follows. The current market structure suggests that Bitcoin could be positioning for a similar breakout, as capital flows back into the system.
It is noteworthy that bullish engulfing patterns have shown their strength only in bull trends, while their effectiveness was significantly lower during downtrends.
Current conditions in the Bitcoin market reflect optimism. The sustained trend based on bullish patterns and record liquidity levels may foresee new historic highs in the near future.
