Bitcoin Bear Market Is Over: 3 Technical Arguments
Bitcoin Bear Market: The crypto market has experienced a slight recovery, with the Bitcoin price regaining the $20,000 range. But the long-term downward trend is far from over. Major cryptos are still 80-90% below their all-time highs.
Nevertheless, more and more arguments are emerging in favor of the thesis that the decline and accumulation period in the crypto market is coming to an end. BeInCrypto presents 3 technical arguments suggesting that the macro Bitcoin bottom has already been reached and a bullish trend reversal may be near.
Bitcoin Bear Market: Watching BTC Price Action
Bitcoin price has been falling since it hit an all-time high (ATH) of $69,000 on November 10, 2021. Since then, BTC price has lost 74.5% and reached a low of $17,600 on June 18, 2022. Bitcoin – the bear market has lasted at least 350 days.
Compared to previous cycles, we see that the decline so far has been milder than in the previous two Bitcoin bear markets. In 2014, the Bitcoin price fell 86% from its historic ATH of $1,177. While in 2018, BTC price fell 84% from the previous ATH to $19,764.
If the Bitcoin price were to reach a lower low, comparable to historical declines, long-term support should be found in the $10,000 area (for an 85% decline from the ATH). Compared to the current valuation near $20,000, this would be another 50% decline and a clear deepening of the cryptocurrency winter.
Chart by Tradingview
Fractals without a lower low
Recently, a number of charts and technical arguments have appeared in favor of an alternative scenario and the imminent end of the Bitcoin bear market. One of them was posted on Twitter by the user @NautilusCap. In his fractal analysis, we see a long-term logarithmic chart of the Bitcoin price, where historical BTC bear markets have been fitted into a descending triangle pattern.
In all three cases, there was a breakdown from this pattern, which in the short term led to a macro bottom of the BTC price. This was followed by an accumulation (yellow area), the completion of which was the start of an uptrend. The analyst emphasizes that a lower low was not generated during the accumulation period.
In addition, the chart compares the current Bitcoin price (red line) with the scaled-up BTC price action in 2015 and 2019, respectively. During these periods, there was a historical accumulation at the bottom of the Bitcoin bear markets. The correlation with today’s price action was 56% and 64% respectively.
Comparing these fractals, it appears that the current accumulation could last about 3 more months before a bullish reversal begins.
3 Technical arguments
Another argument comes from a chart tweeted by the user @Washigorira. This time, the monthly chart of Bitcoin and the Bollinger Bands Breakout Oscillator indicator are taken into consideration. This indicator measures two series of breakout data between the price and the extremes of the Bollinger Bands. Bullish breakouts are represented by the blue areas of the indicator, while the red areas represent bearish breakouts.
In the analyst’s interpretation, the red chart appears to be flattening out. Historically, this has been correlated with the end of a Bitcoin bear market (red dashed lines). The red area may still dominate in the coming months. But reaching the maximum levels of the red breakout signals an imminent trend change.
The Ultimate Oscillator returns from oversold territory
The latest argument from long-term Bitcoin price charts was presented on Twitter by analyst @StockmoneyL. He also used a weekly logarithmic chart of the BTC price. He juxtaposes the highs and lows of historical Bitcoin bear markets and the so-called Ultimate Oscillator.
This indicator, developed by Larry Williams, attempts to correct the shortcomings of indicators related to different time frames. The Ultimate Oscillator does this by using three different time intervals (7, 14, and 28), which represent short-, medium-, and long-term market trends. The interpretation is similar to the RSI indicator. So analysts try to find bullish and bearish divergences and pay attention to overbought or oversold areas.
In the chart below, we see that the Ultimate Oscillator always reached extreme oversold values around the macro bottom of the Bitcoin bear market. It then increased slowly during the accumulation period. A similar situation is occurring now. So @StockmoneyL suggests the end of the Bitcoin bear market is near (red areas).
For the latest BeInCrypto Bitcoin (BTC) and altcoins analysis, click here.
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