Bitcoin (BTC) is currently showing signs of typical “bottom” behavior at its present price levels, according to one prominent leading indicator.
On April 10, John Bollinger, the developer of the Bollinger Bands volatility measure, shared positive news for Bitcoin enthusiasts in a post on X.
Bollinger Bands %b Indicator Hints at Potential BTC Price Recovery
The recent data from Bollinger Bands suggests that Bitcoin may be in the process of establishing a long-term bottom.
Bollinger noted one of his proprietary indicators, referred to as “%b,” while analyzing weekly timeframes. This indicator provides further insights into possible reversals in market trends.
%b assesses an asset’s closing price in relation to its position on the Bollinger Bands, utilizing standard deviation based on a 20-period simple moving average (SMA).
Among its various insights is the “W” bottom formation, characterized by an initial low below zero followed by a retest that produces a higher low—an occurrence that may currently be unfolding for BTC/USD.
Bollinger confirmed to his followers on X:
“Classic Bollinger Band W bottom setting up in $BTCUSD. Still needs confirmation.”
BTC/USD 1-week chart featuring Bollinger Bands data.
On both weekly and daily timeframes, the Bollinger Bands indicate that no trend shift has occurred yet.
Data from various sources shows that the daily chart continues to trend downwards towards the lower band, with the middle SMA serving as a point of resistance.
BTC/USD 1-day chart with Bollinger Bands data.
Looking at stocks, which have become increasingly correlated with BTC/USD, Jurrien Timmer, director of global macro at a major investment firm, reached similar conclusions.
“Reflecting on the Bollinger Bands, we’ve moved from 2 standard deviations above trend, to on trend, to nearing 2 standard deviations below trend,” he mentioned regarding the S&P 500 on April 9.
“Again, oversold but not at a historical extreme.”
Potential Bitcoin Rebound Follows 10% Nasdaq Drop
As reports continue to circulate, targets for Bitcoin’s price bottom increasingly focus on the $70,000 level.
Related: Bitcoin and stocks react negatively to CPI figures—Will large BTC holders intervene?
This figure is significant for numerous reasons, including its role as a psychological threshold and its function as a liquidity magnet.
Network economist Timothy Peterson, whose Lowest Price Forward metric previously predicted a 95% likelihood that $69,000 would hold as support, now believes that Bitcoin will reverse only after stocks establish their own base.
“Bitcoin has led the Nasdaq down during this decline. Being perceived as the asset at the top of the risk hierarchy, I expect the Nasdaq to recover first, followed by Bitcoin. Just something to monitor,” he commented this week.
“But I anticipate that the Nasdaq has another -10% to drop.”
Comparison of Bitcoin and Nasdaq performance.
This article does not provide investment advice or recommendations. Every investment and trading move carries risks, and readers are encouraged to conduct their own research before making decisions.