Bitcoin’s Summer Rebound Shows Hallmarks of a Sustainable Uptrend, Analyst Says

Bitcoin’s recovery from its summer lows is displaying technical characteristics that often precede extended rallies, according to Frank Cappelleri, founder of CappThesis. He outlines three factors suggesting the recent bounce may mark the early stages of a more significant advance.

First, bullish chart patterns have begun functioning effectively again. Bitcoin successfully capitalized on a bullish formation this summer, triggering August’s substantial rally. This marks a notable shift from the period spanning late 2024 into early 2025, when three separate bullish setups failed to generate meaningful follow-through—a classic signature of a downtrend. In contrast, sustainable uptrends are defined by successful breakouts where resistance breaks lead to further upside. The change in pattern behavior implies the current move could still be in its infancy.

Second, the weekly chart structure mirrors the setup that preceded the 2023 advance. Throughout 2024, Bitcoin has carved out a formation remarkably similar to the one that developed from 2022 into 2023. In that prior instance, the cryptocurrency broke resistance as key weekly moving averages inflected higher. Averages that had previously served as declining resistance flipped to become rising support—a hallmark of an asset transitioning from a downtrend to an uptrend. The early 2023 breakout proved to be merely the opening leg of a rally that extended into late 2024; Bitcoin is currently exhibiting analogous price action.

Third, the long-term uptrend remains intact while momentum shows signs of strengthening. The recent recovery commenced near a critical rising trendline dating back to 2017. On three previous occasions, pullbacks toward this trendline were followed by substantial rallies in the ensuing months. Simultaneously, August produced a monthly gain of approximately 20%. During Bitcoin’s weaker phases, moves of this magnitude have been conspicuously absent. The reappearance of such a strong monthly candle, after an extended hiatus, suggests momentum may be improving on a timeframe beyond the immediate short term.

Frank Cappelleri is the founder and president of CappThesis, an independent research firm providing chart and statistical analysis for active investors. He previously spent 25 years on Wall Street as an equity sales trader, technical analyst, research sales specialist, and desk strategist.

Disclosure: None. All opinions expressed are solely those of the contributor and do not reflect the views of CNBC or its affiliates. This content is for informational purposes only and does not constitute financial, investment, tax, or legal advice. Readers should consult their own advisors before making financial decisions.

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