- Bitcoin's breakout to record highs on Tuesday sets it up for more gains ahead, according to technical analyst Katie Stockton of Fairlead Strategies.
- Stockton's measured move price target of $69,121 for bitcoin represents potential upside of 10% from current levels.
- Bitcoin needs to see consecutive daily closes above its recent all-time-high to confirm the move higher, according to Stockton.
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Bitcoin broke out to new all-time-highs on Tuesday, cruising past the $63,000 price level and hitting a record $63,275 as investor anticipation grows for crypto-exchange platform Coinbase's direct listing on Wednesday.
The gains in bitcoin will likely continue in the short-term, technical analyst Katie Stockton of Fairlead Strategies told Insider, assuming that Tuesday's breakout is confirmed by daily consecutive closes above its previous record March high of about $61,742.
If the breakout is confirmed, Stockton sees the potential for bitcoin to gain an additional 10% from current levels in the short-term, surging to $69,121 based on a measured move price projection.
A bullish measured move is considered a continuation pattern among technical analysts, and it generally consists of three parts: a reversal advance, a period of consolidation, and a continuation rally.
The size of the initial reversal advance is then projected forward from the low of the consolidation period to generate the price target.
Bitcoin's reversal advance occurred in early March, as the cryptocurrency rallied about 44% after suffering a decline of 26% in mid-February. Bitcoin's rally to about $61,742 on March 13 was then followed by a period of price consolidation, with it trading flat over the next month despite a short-lived 18% correction to $50,360 on March 25.
After bitcoin's break to new record highs on Tuesday, Stockton believes the month-long period of consolidation is over and that a continuation rally for bitcoin is set to unfold.
But there is still downside potential for bitcoin, especially if the cryptocurrency fails to establish consecutive daily closes above its previous March high.
If bitcoin breaks below $61,742 in the short-term, it could trend lower to support near its 50-day moving average around $55,000, representing downside potential of about 13% from current levels, Stockton said.
Whichever way bitcoin trades going forward, Coinbase investors will be closely watching, given that the directional volatility in the cryptocurrency has a big impact on the company's earnings.
