Bitcoin (BTC) is down around 30% after hitting a high of 5.8 million rubles per token on March 9. However, such a drop could be an excuse for traders to dump another large stock of the Russian national currency if a classic bullish continuation pattern takes place.
Bitcoin is heading towards 11 million rubles
Nicknamed the “rising triangle”, the pattern appears when price consolidates between a rising lower trend line (support) and a flat upper trend line (resistance). It is completed after the price breaks out of the consolidation range in the direction of its previous trend, observing levels of length equal to the maximum distance between the upper and lower trend line of the triangle.
The price of BTC against the ruble has been trending within a similar structure since January 2021, as shown in the chart below. It closed above the upper trend line of the triangle, rising more than 20% to its all-time high of 5.88 million rubles.
Nonetheless, BTC corrected to test range resistance as support, a common occurrence after breakouts as traders look for confirmation of the pattern with the most upside potential.
If this is the case, the probability of recovering and continuing towards 11 million rubles seems high in the future, an increase of almost 140%.
Russian capital controls
The bullish technical outlook for the BTC/RUB market also comes amid an ongoing exodus of Russian assets since the Russian invasion of Ukraine, as Western nations have collaborated to damage the country’s ties to the global banking system.
As a result, the Moscow Stock Exchange suspended trading from February 28 until further notice. Similarly, shares of Russian-backed companies abroad have suffered, with an MSCI index that tracks its exchange-traded funds reporting a nearly 78% outflow since the invasion began on February 24.
As of March 7, the ruble had plunged more than 50% so far this year against the US dollar, its biggest decline since 1998, when Russia defaulted on its debt. The Russian central bank intervened through a sequence of capital control measures, including a ban on foreign exchange sales for six months.
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