Bitcoin's Rare Technical Signal Flashes Bullish Crossover Ahead of Bear-Market Bottom
Bitcoin's price surged from around $76,000 to above $80,000 on Friday, sparking attention to a rare technical indicator. According to analyst Willy Woo, Bitcoin's monthly Fisher Transform flashed a bullish crossover, which has only happened four times in the asset's history. The previous three instances coincided with bear-market bottoms.
The latest crossover is significant because it has historically preceded a reversal of the trend. However, Woo cautioned that this signal doesn't automatically mean the trend is ready to reverse. He noted that price can sometimes stop and resume in the same direction, especially during bull markets.
Woo attributed the reason for this phenomenon to the type of traders involved near market tops. Long-term investors tend to stop buying at cycle tops, while speculators continue to pile in, driving prices up on momentum alone. Conversely, it's long-term investors who return when they find value after speculators exit.
Glassnode pointed out that Bitcoin's entity-adjusted Spent Output Profit Ratio (SOPR) has moved back above 1, a sign of sustained readings above the level indicating a 'hallmark of a bull market'. Meanwhile, analyst PlanB predicts the next target for Bitcoin will be its 100-week moving average near $89,000.