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Bitcoin indicators hint bottom is forming; Is a BTC recovery imminent?

Bitcoin indicators hint bottom is forming; Is a BTC recovery imminent?

As the entire cryptocurrency market continues to swim in a sea of red, the price of Bitcoin (BTC) is struggling to stay above the critical psychological level of $16,000; however, some technicals point a bottom is near, indicating an upcoming price recovery.

Indeed, upon observing the Fibonacci-Dollar Cheat sheet, the experts at TradingShot have noted the link between Bitcoin halvings, “the shock they fundamentally deal and have done so historically and the U.S. Dollar Index,” according to their analysis published on November 20.

Fibonacci and Dollar Cheat sheet. Source: TradingShot/TradingView

Previous Time Fibonacci patterns

First of all, the timing of the post-halving recoveries has previously followed certain rules, or as the TradingShot team explained, “the price tends to rally aggressively after each Halving (Fib 0.0) until Fib 0.236,” which is classified as the Parabolic Phase.

Furthermore, between Fib 0.236 and 0.382, Bitcoin typically makes the final rally and forms its Cycle Top. Following this territory, Bitcoin enters the Bear Phase from Fib 0.382 to 0.5.

Going forward are the concluding stages of the Bear Phase, between Fib 0.5 and 0.618 (the Despair Phase), in which Bitcoin prepares for its final and most significant decline. Finally:

“From Fib 0.618 to 0.786, BTC traditionally forms the Bottom of the Cycle, signaling the end of the Bear Market. (…) From Fib 0.786 to 1.0 (next Halving), BTC officially starts the new Bull Market.”

How the BTC bottom is calculated

To calculate a potential bottom level, the team used the horizontal Fibonacci levels, measured “from the bottom of the Halving candle to the top of each Cycle,” and as they deduced:

“The first Cycle bottomed after the 0.382 Fib broke. The second Cycle bottomed after the 0.5 Fib broke (a Fib level lower than the previous Cycle), while the current Cycle has already broken Fib 0.618 (a Fib level lower than the previous Cycle).”

Taking into account that the FTX-caused crisis and lows are taking place during the Bottom Formation Phase, the cheat sheet indicates that the phase’s end is in May 2023.

Dollar’s role

The TradingShot analysts also explained the major part that the USD plays in the whole calculation, considering that Bitcoin is valued in U.S. Dollars and that, historically, this means that “Bitcoin tends to rise when the DXY falls.” 

Specifically, Bitcoin bottomed out and started the 2020/2021 Parabolic rally after USD stopped its previous run in March 2020, “right on the COVID crash. The previous USD top was in December 2016, when again Bitcoin was in its ‘Parabolic Phase’. The USD’s previous top was in March 2015, right at the start of the 2015 ‘Bottom formation’ phase.”

When will Bitcoin recover?

In conclusion:

“Whether the price rebounds now as in 2019 or toward the end of the phase as in 2015, it remains to be seen, and certainly depends on a lot of variable factors, most of which fundamental. Stability in the stock market is definitely among the top ones.”

It is worth noting that the pseudonymous crypto analyst Moustache also sees a bottom for Bitcoin coming up, judging by the previous patterns of its price movements in the post-halving periods. According to this expert:

Meanwhile, Bitcoin was at press time trading at $16,005, recording a decline of 3.76% on the day, as well as 4.38% across the week, with a market capitalization of $308.32 billion, as per data retrieved by Finbold on November 21.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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