Key takeaways:
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Since 2021, 78% of Bitcoin’s bullish engulfing patterns have led to new native highs, particularly inside broader uptrends.
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Bitcoin has absorbed over $544 billion in capital since November 2022, pushing the realized market cap to $944 billion.
Bitcoin (BTC) closed Monday with a powerful 4.34% every day acquire, forming a bullish engulfing candlestick that totally reversed the earlier two days of bearish worth motion. This sample, coupled with BTC sustaining assist above the $105,000 stage for 2 consecutive days, indicators a possible shift in market construction and provides weight to the continued restoration.
Regardless of the bullish technical setup, market sentiment stays divided, prompting a deeper examination. To evaluate the reliability of this sample, Cointelegraph did a comparative evaluation of all bullish engulfing formations on BTC’s every day chart since 2021.
Whereas the bullish engulfing sample served as the first sign, further standards have been used to validate its power:
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The engulfing candle should embody a minimum of the earlier two candles.
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The sample ought to emerge on the tail finish of a corrective part, indicating a possible development reversal.
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Within the classes following the engulfing sample, a transparent break of construction needs to be noticed to substantiate bullish momentum.
Since January 2021, Bitcoin has recorded 19 cases of the bullish engulfing sample assembly the outlined affirmation standards. Out of those, 15 led to the formation of recent native highs within the following days or perhaps weeks, translating to a historic success price of roughly 78%.
Notably, all 19 cases occurred inside a broader bull market context. In 2024 and 2025, there have been solely two failed indicators, in Could 2024 and March 2025, the place the sample didn’t result in new worth highs.
Regardless of these exceptions, the prevailing bull market construction suggests a statistically favorable setting for continuation, with Bitcoin at the moment positioned to make new highs earlier than probably retesting the $100,000 stage.
For broader context, the identical sample was additionally noticed through the 2022 bear market, the place 4 occurrences have been recognized. None of those led to new highs, with three cases clustered inside February 2022.
This distinction underscores the significance of development context, because the sample’s effectiveness has traditionally been restricted in downtrends, additional reinforcing the upper chance of success through the current bull market.
Related: Bitcoin price starts ‘normal and healthy’ support test as $108K halts bulls
Bitcoin flashes “undeniably bullish” liquidity situations
Bitcoin market situations are flashing a setup not witnessed since late 2022. Regardless of widespread panic, BTC bottomed at $16,800 and doubled in three months. In line with latest information from Swissblock, liquidity ranges have returned to these seen in December 2022, hinting at a probably bullish continuation.
Whereas the macro setting, market members and catalysts have modified, one basic reality stays constant: When liquidity recovers, BTC worth follows. The present construction means that Bitcoin might be positioning for the same breakout, as capital flows again into the system.
The position of liquidity has advanced considerably this cycle, highlighting Bitcoin’s rising maturity as a macro asset. For the reason that cycle low in November 2022, Bitcoin has absorbed over $544 billion in contemporary capital inflows, driving its inner community liquidity or realized market cap to an all-time excessive of $944 billion.
Related: Bitcoin analysts say this must happen for BTC price to break $112K
This text doesn’t include funding recommendation or suggestions. Each funding and buying and selling transfer includes threat, and readers ought to conduct their very own analysis when making a call.
