Crypto analyst TechDev (@TechDev_52) recently shared detailed chart analysis suggesting that Bitcoin may be on the verge of its biggest breakout yet. This analysis, supported by historical patterns and technical indicators, points to a potential market shift that could lead to unprecedented Bitcoin price levels.

The chart provided by TechDev illustrates Bitcoin’s price action in USD along with its price relative to the M1 money supply (BTC/M1). Historically, Bitcoin has exhibited distinct phases of parabolic price growth, called “blowout peaks,” followed by edged corrections. These blow-by peaks are marked with green markers on the chart and occurred in 2011, 2013 and 2017. Each of these blow-by peaks was followed by significant corrections.

It is worth noting that the 2021 high did not result in a breakout, as indicated by the red cross on the chart. This deviation from historical patterns is critical because it suggests a possible change in market behavior.

The TechDev chart also highlights a key pattern known as the “right-angle-expanding descending pattern.” This technical pattern is characterized by a series of lower highs and lows, creating an expanding wedge shape. The pattern usually signals a period of consolidation in which price oscillates within widening trend lines before breaking out decisively. The chart shows that Bitcoin recently broke out of this widening wedge, indicating a potential transition from a consolidation phase to a recent bullish trend.

The analyst commented: “Significant. Bitcoin has only seen a breakout from the highs against the M1 money supply. The longer it is consolidated, the longer it lasts. This breakout comes after the longest consolidation yet. In fact, this represents a textbook break of the 5-year widening wedge. The last 5 years have been corrective to M1. BTC has once again reacted impulsively since 2017. We have never seen Bitcoin breakout like this.”

Bitcoin may overtake the 2021 cycle

Another critical aspect of TechDev’s analysis is Bitcoin’s outperformance of the M1 money supply. The M1 money supply includes physical currency and checkable deposits, which are the most liquid forms of money in the economy. TechDev notes 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 enhance is due to domestic demand and not just an enhance in the money supply.

TechDev comments on this breakout, stating: “We are looking at Bitcoin’s first breakout relative to the M1 money supply since March 2017, when it has historically remained parabolic for 9 months. Trend comparisons and forecasts for 2021 may end up being a dramatic underestimation. One interpretation: BTC rose to new highs in USD in 2021 as a result of the increased money supply. In 2024, he got there at his own request (and thus broke against M1). Add in M1’s projected growth this time around, and we’ll 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 such as the M1 money supply. Breaking out against M1, Bitcoin is showing forceful domestic demand, which is a bullish signal for future price movements. Historical patterns of blowoff tops following similar breakouts suggest that Bitcoin may be entering a recent phase of price discovery, potentially leading to recent all-time highs.

At the time of publication, the price of BTC was $69,032.

Featured image created with DALL·E, chart from TradingView.com