FameEX Hot Topics | Bitcoin Typically Jumps 50% After These Patterns Emerge

Bitcoin price rallies are often driven by investor reactions to inflation fears or stronger-than-expected economic data. While these factors influence market sentiment, reliable indicators of major price surges are uncommon. However, analysts have observed a consistent pattern: when three key conditions align—eased expectations around U.S. Federal Reserve policy, low leverage in the crypto market, and solid U.S. retail sales—Bitcoin tends to rally significantly, often gaining 50% or more within a matter of weeks.

This pattern played out most recently in early 2024. At that time, Bitcoin rose from $40,000 to $73,500 in just seven weeks. The rally was fueled by signs the Federal Reserve might slow down its monetary tightening, while crypto market leverage remained low, indicating a lack of speculative excess. In addition, U.S. retail sales data exceeded forecasts, suggesting resilient consumer demand. A similar scenario unfolded in early 2023, as Bitcoin jumped from $16,700 to $25,100, again within a seven-week span. A third instance was recorded between July and September 2021, when Bitcoin surged 76% under comparable conditions.

In December 2023, Bitcoin hovered near $43,000 and made a failed attempt to break above $48,000 in early January. The rejection led to a swift decline to $37,800 by the end of the month. Yet, this downturn set the stage for another sharp rebound. One of the key catalysts was the extremely low funding rate for perpetual futures—just 4% annually—signaling subdued demand for leveraged long positions, which is often a bullish signal in hindsight.

At the same time, U.S. retail sales for December 2023, released on January 17, posted a 0.6% month-over-month gain, outpacing the 0.4% forecast. Later, on January 31, Fed Chair Jerome Powell confirmed a hawkish stance, signaling no immediate rate cuts. This helped stabilize inflation expectations without suggesting an overheated economy, boosting investor confidence further.

A nearly identical setup occurred in January 2023. After two months of Bitcoin trading below $18,000, the perpetual funding rate spiked to 50% in early January. This shift coincided with a 3% rise in U.S. retail sales—far above the 1.9% estimate—and Powell’s speech in Sweden reinforcing a tight monetary policy approach.

Together, these historical examples show how the interplay of low leverage, firm retail data, and Fed policy signals can create ideal conditions for Bitcoin rallies. Traders are now closely watching Powell’s upcoming June 18 speech, along with retail sales data due on June 17 and July 15, and the Jackson Hole Symposium starting August 21, as potential triggers for the next move.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.