Bitcoin Bear Market: With the price of Bitcoin reclaiming the $20,000 area, the crypto market has experienced a slight recovery. However, the long-term decline is not over yet. The major cryptos are still down 80-90% from 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 about to end. BeInCrypto presents 3 technical arguments suggesting that the macro Bitcoin bottom has already been reached, and a bullish trend reversal may be imminent.
Bitcoin Bear Market: Looking at BTC Price Action
The price of bitcoin has been falling since reaching an all-time high (ATH) of $69,000 on November 10, 2021. Since then, the price of BTC is down 74.5% and reached a low of $17,600 on June 18, 2022. Bitcoin is in a bear market lasting at least 350 days.
Compared to previous cycles, we see that the decline so far has been modest compared to the last two bitcoin bear markets. In 2014, the price of bitcoin fell 86% from the all-time ATH of $1177. Whereas in 2018, the price of BTC fell by 84% against the previous ATH to $19,764.
Thus, if bitcoin price reaches lower lows, which would equate to all-time lows, long-term support should be found in the $10,000 area (for a drop of 85% from ATH). With respect to the current valuation of $20,000, this will be another 50% drop and the crypto winter will certainly deepen.
chart by tradingview
Fractals Without Lower Low
Recently, several charts and technical arguments have emerged in favor of an alternative scenario and the imminent end of the Bitcoin bear market. One of them was posted on Twitter by a user @NautilusCap, In his fractal analysis, we see a long-term logarithmic chart of bitcoin price, where the historical BTC bear market has been fitted into a descending triangle pattern.
In all three cases, there was a breakdown from this pattern, leading to a macro bottom for BTC price in the near term. This was followed by an accumulation (yellow area), the completion of which marked the beginning of an upward trend. The analyst stressed that the low low did not occur during the accumulation period.
Furthermore, the chart compares the current bitcoin price (red line) with the increased BTC price action in 2015 and 2019 respectively. In that period, bitcoin was a historic accumulation at the bottom of 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 around 3 months before a bullish reversal begins.
3 Technical reasoning
Another argument is provided by user-tweeted charts @washigorira, This time the monthly chart of bitcoin and the Bollinger Bands breakout oscillator indicator are taken into account. This indicator measures two series of breakout data between the price and extremes of the Bollinger Bands. Bullish breakouts are represented by the blue areas of the indicator, while red areas represent bearish breakouts.
From the analyst’s interpretation it appears that the red chart is flat. Historically, this has been correlated with the end of a bitcoin bear market (red dashed line). The red zone may still dominate in the coming months. But reaching the maximum level of the red breakout indicates an imminent change in trend.
Last Oscillator returns from oversold zone
The final argument to come from a longer-term bitcoin price chart was presented on Twitter by analyst @StockmoneyL. He also used the weekly logarithmic chart of BTC price. He connects the upper and lower ranges of the historical bitcoin bear market and the so-called Ultimate Oscillator.
Developed by Larry Williams, this indicator attempts to correct the inadequacies of indicators relating to various time frames. Ultimate Oscillator does this by using three different time intervals (7, 14 and 28), which represent short, medium and long term market trends. Its interpretation is similar to that of the RSI indicator. So analysts try to spot the bullish and bearish differences and look for overbought or oversold areas.
In the chart below, we see that the Ultimate Oscillator has always reached extremely oversold values around the macro bottoms of the Bitcoin bear market. It then increased gradually during the accumulation period. Similar situation is happening now. So @StockmoneyL suggests that the end of the bitcoin bear market is near (red zone).
For the latest BeInCrypto Bitcoin (BTC) and altcoin analysis, click here,
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