Bitcoin is poised to “regain the spotlight” as its price movements catch up with U.S. equities, according to new analysis. In an Oct. 19 blog post, Caleb Franzen, founder of Cubic Analytics, highlighted the potential for a significant Bitcoin price breakout.
Bitcoin needs to recover in order to align with the recent performance of U.S. stocks, as the S&P 500 continues to hit new all-time highs. Franzen analyzed BTC/USD relative to the Invesco S&P 500 Equal Weight ETF (RSP), noting that Bitcoin has not reached new highs against RSP since 2021 and has been consolidating within a regression channel.
“On a relative basis, Bitcoin failed to produce new ATH’s vs. the equal-weight S&P 500,” Franzen wrote, pointing out that BTC/RSP is now starting to break above the regression channel. He suggested traders might consider a strategy of going short on RSP while going long on Bitcoin.
“Based on this structure, the ongoing breakout implies a return back to the blue zone,” he added, identifying this area as potential resistance but also a price target.
Franzen’s optimism was supported by the Williams%R Oscillator, a trend strength indicator. The 120-day version of this tool suggests further upside, having rebounded from macro lows in the oversold zone back in July. He noted that similar signals in January 2024 and October 2023 resulted in BTC/USD gains of 48% and 123%, respectively, over the next three months.
“With Bitcoin currently trading at its highest prices since July 2024, investors are regaining confidence in the potential for continued upside, particularly with stocks at all-time highs,” Franzen explained.
As Bitcoin hovers near $69,000, attention is focused on whether it can break above its final resistance level, which has held since March. The first daily closes above the descending channel since then have fueled a bullish outlook.
Popular analyst Rekt Capital emphasized the importance of recent price moves, noting, “History has been made as Bitcoin has registered its first Daily Candle Close above the red resistance area.” He added that maintaining support above $66,400 could ensure a bullish weekly close for BTC.
