The Running Continuation

This one is going to be fairly short.

In the early stages of strong bull markets, we see structures known as “running continuations”. Out of all of the continuation structures out there, this is by far the most bullish as it represents a very very strong bid from the bulls that is absorbing all excess supply at higher and higher values.

Notice how the swing lows fail to even make a horizontal structure on the downside. In my prior Substack article, I wrote about the expectation I have that the market will ultimately form a trading range. However, over the last week the demand has proven so strong that we couldn’t even push down low enough to form a trading range lower boundary.

So what does this mean? It means that there has been a massive, ascending accumulation of BTC that is not ready to sell anytime soon. The type of players that are buying up BTC in this fashion typically have no desire to sell their accumulated BTC anywhere around these levels. They will push the market higher and sell at a much higher price.

Here is an example of a running continuation from earlier in the year:

Notice the similar structure of volatile swings that always trends up. The lows are aggressively bought until the seller exhaustion hits a critical point and no longer suppresses the price. Then we see a rapid expansion to the upside:

Two things to note here:
1. The aggressive price expansion to the upside
2. The floor of the range that followed, was supported by the running continuation’s breakout level. Thus, supporting the idea that a massive markup campaign and continuation is in store.

Also notice the structure of the daily Bollinger Bands and compare them to our current structure:

Notice how the running continuation breakout begins with the daily close on the upper BB20. This is a textbook Bollinger Bands breakout that supports the idea of the Running Continuation breakout — confluence.

So let’s talk price targets. You can think of a running continuation as a giant bull flag that is so bullish that slants upwards in its consolidation. So, just like a bull flag, we measure the length of the “pole” that preceded the consolidation, and get our measured move by projecting the length of the pole onto the breakout level:

Target = $137,000

Keep in mind this is a rough target and should be taken with a grain of salt — so don’t be like “oh it only ran $30,000 — clearly there is $2,000 left on this move”. These targets aren’t that literal.

All of that to say is that we should buckle up because I think we have a monster EOY rally coming up. And, in typical fashion, I expect BTC to drain capital from alts. So, I wouldn’t be surprised if your favorite alt stays flat or ticks down while BTC soars over the next 1-2 weeks.