Fidelity's pattern points above $105,000. The target quoted is $100,000

Jurrien Timmer of Fidelity sees a double bottom in bitcoin pointing at $100,000, and the chart he describes points somewhat higher than that. Run the pattern's own arithmetic and the number that falls out is between $105,567 and $107,858, depending on which of the two lows you measure from.

“Bitcoin is looking particularly interesting here as it challenges key resistance at $80k. If it breaks it will confirm a double bottom targeting $100K.”

— Jurrien Timmer, Fidelity Investments

Jurrien Timmer, director of global macro at Fidelity Investments

The pattern, in the numbers given:

• First low: $60,033. Second low: $57,742.
• Neckline, the peak between them: about $82,800.
• A measured move adds the depth to the neckline. From the lower bottom that gives $107,858, from the higher one $105,567.
• The target being quoted is $100,000, which sits between $5,600 and $7,900 below what the pattern's own arithmetic produces.

This is not a correction so much as a curiosity. A measured move is the oldest arithmetic in technical analysis: take the depth of the formation and project it up from the breakout level. Doing that here produces a target 6% to 8% above the one in the headline, which makes the quoted $100,000 the conservative reading of a bullish call rather than the aggressive one. Analysts usually round in the other direction.

The quote and the tape have drifted

The quote and the tape have also drifted apart. Timmer describes bitcoin as challenging key resistance at $80,000, while the neckline in the same analysis is $82,800 and the price on the day was $84,117. On those numbers the breakout being anticipated has already happened, and the interesting question is not whether the level goes but what it does on the retest.

The options book is where the enthusiasm gets weighed. Open interest sits heaviest on the $90,000 call and lightest on the $100,000 one, thinning by 26.9% across that range. Traders are paying for the first leg of this thesis considerably more than the second, which is a reasonable way to express belief in a direction without believing the round number attached to it.

Every macro variable says the opposite

What makes the quarter genuinely odd is the backdrop. Bitcoin is up more than 40% over three months while the 10-year Treasury yield reached its highest level since 2007 and the dollar index climbed 2.75% since 9 September, from 98.78 to about 101.50. Rising real rates and a rising dollar are the two things that are supposed to hurt a non-yielding asset priced in dollars. We traced that transmission yesterday and found the rate channel is the one that actually carries. This quarter it is carrying nothing.

Gold fell almost 4% on Monday while bitcoin held the $80,000s, which is the comparison the headline is built on, and it is one day. The useful test arrives if the 10-year keeps climbing. On Monday the same board fell in order of leverage rather than macro, and a market that ignores rates on the way up tends to remember them all at once.

Informational only, not investment advice. Chart patterns describe what has happened and do not oblige a price to do anything, and the arithmetic below is ours rather than Fidelity's.