At long last, Bitcoin has shown signs of life, rallying by 20 percent from the $6,800 bottom put in nearly two weeks ago. Although this recent price action has been deemed a “relief rally” by some analysts, more and more indicators suggest that BTC and the rest of the cryptocurrency market are on the verge of returning to a decisively bullish phase.
Is the bottom in?
Over the past few weeks, analysts have been struggling, questioning if the leading cryptocurrency actually established a macro bottom at $6,400 in mid-December, when it surged decisively off that level in an immediate 20 percent bounce.
According to new analyses, the bottom is in, setting the stage for the next leg of upward growth.
Trader Byzantine General recently pointed to the below chart, which he posted via Twitter.
As he depicts, Bitcoin’s recent price action and the one-week Relative Strength Index underwent the exact same pattern they did in the previous market cycle, with there being an RSI break under 40 in a bear market, then a relief rally, and perfect re-test of 40 to kick off the next bull market.
Not to mention, Murad Mahmudov, CIO of Bitcoin fund Adaptive Capital, recently observed on Twitter that there is nearly no way BTC is falling much further than it already has, because “as crazy as it sounds, the -53 percent drop from $13,888 to $6,410 wasn’t a full out bitcoin bear market, but rather, unironically just mid-bull cycle correction.”
This assertion can be corroborated by on-chain data from Mahmudov’s partner, Adaptive Capital’s Willy Woo, who wrote in a crypto-viral tweet that Bitcoin’s investor activity data is showing clear signs of bull market reaccumulation.
Are we in a $BTC bear market?
No, we are in the re-accumulation phase of a bull market. pic.twitter.com/OcMyxA4EIY
— Willy Woo (@woonomic) December 28, 2019
Bitcoin preparing to break higher
While the bottom is confirmed, are there signals suggesting Bitcoin is soon to explode higher? Per a number of prominent traders, there are many.
The Lucid Stop and Reversal (SAR) system recently printed a buy signal on Bitcoin’s weekly chart for the first time since March 2019, prior to the 330 percent rally that shocked the collective cryptocurrency world.
This signal has been eerily accurate on previous occasions too, flipping bearish prior to Bitcoin’s 50 percent decline from the $6,000s to $3,150 that took place at the end of 2018, and printing a buy signal when BTC was at $2,700 in July of 2017, preceding a 670 percent rally.
On the less technical side of things, Bitcoin is now four or so months out from its next block reward reduction, known as a “halving” or “halvening.” Prominent investors, including former Goldman Sachs employees, have suggested that this event will affect BTC’s supply-demand dynamics in a way that will push prices dramatically higher, as covered in this CryptoSlate report.
Bitcoin, currently ranked #1 by market cap, is up 0.91% over the past 24 hours. BTC has a market cap of $148.26B with a 24 hour volume of $22.29B.
Chart by CryptoCompare
Posted In: Bitcoin, Analysis, Price Watch