Why Bitcoin May Be Less Than 120 Days Away From Retesting ATHs
Bitcoin price is currently pulling back along with the broader crypto market after a strong move from $20,000 to $29,000 in two weeks. The strong rise is causing the market to speculate that a bottom may be in store.
If the bottom is indeed in, based on past historical performance, BTCUSD could be back testing all-time highs within 120 days or less. Find out why below.
Why BTCUSD could reach previous highs in 120 days or less
All markets are cyclical, and crypto is no different. For example, Bitcoin exhibits cyclical behavior based on its halving event, where the block reward miners receive in BTC is cut by 50%.
In technical analysis, all types of timing-related behavior exist. Another example includes the January effect, or the concept of selling in May and walking away, both of which represent seasonality in cryptocurrencies and other markets.
Serial correlation, or autocorrelation, is another time-based observation where price action correlates with price action from a previous data set in the same asset. An example of this is the phenomenon that Bitcoin has reached its peak between November and December three times in a row: in 2013, 2017 and again in 2021.
Using the six-week Bollinger Bands and the idea behind serial correlation, it may be possible to predict that the Bitcoin price will return to $65,000 per coin in less than 120 days, as previous data suggests.
BTC has always hit the upper band within 120 days from now | BTCUSD on TradingView.com
Could Bitcoin be back to previous highs in a few months?
Past price history is not a guarantee of future performance, but from historical data, technical analysts can improve the probability of success by using such information.
When we look at previous bottoms in the Bitcoin price on the six-week time frame, two large white candles always signaled that a bottom was in. This represents more than 12 weeks of positive performance, just one full quarter.
As soon as the bottom was in, Bitcoin pushed above the middle SMA on the Bollinger Bands, and during the next several candles immediately followed the upper Bollinger Band.
In 2015, after the bottom was in, it took seven 6W candles before it touched the upper BB. Four years later in 2019, BTCUSD did so in just five 6W candles. Even in the longer end of the two cases, it would suggest that Bitcoin could touch the upper Bollinger band within 120 days.
What makes this impressive and very different from the past is the fact that the upper Bollinger bands on the time frame are at $64,000 per coin, or right around the previous all-time highs set in 2021. Can BTCUSD really be back at previous ATHs in less than 120 days?
#Bitcoin 6W Bollinger Bands: After the bottom was in, BTC hit the upper BB within 7 bars
In 2019 it only took 5 bars. In 2023, our fifth bar just opened.
If BTC were to hit the upper BB again for >7 bars, this suggests we will see BTC at $64K+ within 3-4 months or ~120 days. pic.twitter.com/GCmcBT9lQs
— Tony “The Bull” (@tonythebullBTC) March 27, 2023
