Bitcoin Bottoms In this episode of NewsBTC’s daily technical analysis videos, we compare past Bitcoin bottoms and tops using the Pi Cycle Bottom and Pi Cycle Top indicator. We also dive into recent comments from John Bollinger, creator of the Bollinger Bands.
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VIDEO: Bitcoin Price Analysis (BTCUSD): September 9, 2022
This video provides a detailed view of Bitcoin market cycles using the Pi Cycle Bottom indicator and other tools. A recent exchange between Tony “The Bull” and the creator of the Bollinger Bands is also a subject of discussion and associated analysis.
Are Bitcoin Bottoms as Simple as Pi?
The Pi Cycle Bottom Indicator fired back in July, but price action tested lows for the second time. Looking back at history, it is visually clear that the tool has been fairly accurate in its top and bottom signals.
For further reassurance, we used technical indicators such as the Relative Strength Index and LMACD. As a reminder, the LMACD is the logarithmic version of the MACD, which provides signals over long time frames that allow for a better cycle-to-cycle comparison.
Bearish momentum hit at exactly the same point in the past two market cycles on weekly timeframes, coincidentally closely coinciding with the firing of the pi cycle bottom indicator. The RSI has also reached oversold levels in both previous instances. Layer in some cyclic tools, and we have what looks like a pattern.
A historical look at past Pi cycle Bottom and Top signals. | Source: BTCUSD on TradingView.com
While everyone is incredibly bearish and expects new lows in #Bitcointools with a 100% success rate suggest the worst is over and are in sync with previous cycle bottoms. pic.twitter.com/mrk0zJFFhK
— Tony “The Bull” Spilotro (@tonyspilotroBTC) September 9, 2022
Exploring the Bollinger Bounce
The Bollinger Bands recently behaved like previous setups, with the most recent bottoming out at $29K for the first time, before finally breaking down after revisiting this year.
The last major bottom also had a similar but less pronounced bullish divergence on the RSI. The current setup also resembles the “China Pump” of October 2019, where Bitcoin climbed by more than 40% in less than 72 hours.
A similar move of such magnitude would take the leading cryptocurrency by market cap to over $26,000 per coin on Monday afternoon. The creator of the tool, John Bollinger, warns that the current setup lacks the necessary “squeeze” for a “head fake” – terminology specific to the wave the Bollinger Bands carry.
Is this a similar setup? | Source: BTCUSD on TradingView.com
It wasn’t a real Squeeze, so it can’t be a Head Fake.
But if we reverse tomorrow, it could be a nice trade.
— John Bollinger (@bbands) September 6, 2022
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Featured image from iStockPhoto, Charts from TradingView.com