In this episode of NewsBTC’s daily technical analysis videos, we use the Fisher Transform and other tools to see how close Bitcoin is to putting an end to crypto winter.
Have a look below at the video.
VIDEO: Bitcoin price (BTCUSD), October 24, 2022, Crypto Winter
Bitcoin is still boring. But this video is about what happens when it becomes dull, a notoriously volatile cryptocurrency. Bitcoin is a boring boy because it has all the downsides and none of its rallies.
“Here’s Johnny:” What Happens When Bitcoin Becomes A Dull Boy
Bollinger Bands get tighter, indicating that explosiveness will soon come soon enough. This ongoing calm is only the calm before it storms. Daily Bollinger Band Width now stands at its lowest point since Oct 2020 just prior to the bull breakout of 2020. The bands were tighter just before the 2018 bear market crash.
Bollinger Band Width, which is measured over weekly time frames, has dropped 50% since its November 2018 collapse. In all instances prior to that, when bands became this tight, there was an incredible rally.
This is a rare phenomenon. Bollinger Bands have been expanding since they were at their tightest point in years. A bull run has always been triggered by rising volatility after such a low point. Are you sure the third time is the charm?
Bollinger Bands some of the tightest in history | Source: BTCUSD on TradingView.com
Related reading: What’s the Final Wave in Ethereum? | ETHUSD Analysis October 19, 2022
There are several weeks of crypto winter that could continue.
After this weekend’s weekly close, Bitcoin bulls have now closed three full weeks with a confirmed bullish crossover on the LMACD. Only a few weeks away, the market would be making an upward move that is larger than it was at its 2018 bottom.
A comparison to the 2015 bear markets bottom shows us that, even though there may be no new bottoms, the wait could prove twice as long as the current range.
Other possible signals on weekly timeframes that could suggest we’ve seen the bottom already, is that Heiken Ashi candles are starting to turn green.
Use Cyclical Timing tools to indicate that Spring is almost here
Also, the two-week Fisher Transform is now turning bullish (pictured left). The signal will not be confirmed for 14 more days. Fisher Transform, which is used to locate major turning points on markets, works well in the shortest timeframes.
Moving to the monthly timeframe (pictured left), we can see that even here the Fisher has very little room left and if Bitcoin hands around here for another week or so, the monthly should begin to flatten, signaling a possible turnaround in price action. With Bitcoin’s monthly standard deviation of -3.0, the Fisher Transform only has a 0.1% chance that this bear market will persist.
