Bitcoin (BTC) hasn’t done too hot over the past few months, plunging some 50% since the June top of $14,000. The selling has stopped over the past few weeks, with the price of the leading cryptocurrency flatlining in the low-$7,000s.
Despite this, sentiment has been rather bearish, with a confluence of prominent technical analysts recently remarking that they expect for the price of Bitcoin to tumble by 20% over the next few weeks.
Hodlonaut, a prominent Bitcoin proponent and commentator, noted, though, that the sentiment backdrop is the perfect place, by traditional BTC standards, to “start a rip your face off rally.”
The kind of sentiment doldrums we are in now
People seemingly accepting that 7k is fair value
Dozens of bull narratives proven wrong
Fatigue high, hype low
Is exactly the type of place where it would be trademark Bitcoin character to start a rip your face off rally
— hodlonaut🌮⚡🔑 (@hodlonaut) December 28, 2019
While Hodlonaut’s comment was based primarily on conjecture, there are concrete fundamental and technical signs that suggest Bitcoin is ready to burst higher, despite the 50% drop that has taken place over recent months.
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Bitcoin Indicators Flip Bullish
According to a recent tweet from full-time cryptocurrency trader Crypt0mer, Bitcoin’s one week chart recently printed an extremely bullish signal: the one-week Klinger Oscillator, which tracks volume and price to determine trends, has printed a buy for the first time since February 2019, when BTC was trading around $3,700.
Similarly, Scott Melker, also known as the Wolf of All Streets, observed another positive sign on Bitcoin’s weekly chart. The sign was a “massive bullish divergence in oversold territory on Stochastic Relative Strength Index.”
On the fundamental sign, the Bitcoin network saw a record 2019, with the blockchain setting a number of all-time records in terms of on-chain metrics.
Per previous reports from NewsBTC, TradeBlock, a cryptocurrency analytics and research upstart, noted that the Bitcoin network this year set records for transaction count, transaction volume in USD, and hash rate.
The growth in transaction count seemingly stems from the growing adoption of the SegWit solution, allowing for more transactions to be put into each block, while the aggregate yearly Bitcoin transaction volume was aided by the price action over the past few months, which has forced exchanges and traders to use the network as a medium of payment.
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Willy Woo, a partner at crypto fund Adaptive Capital, has thus suggested that per his indicators that track investor activity, Bitcoin is not in a bear market.
Rather, as Woo continued in the tweet, the indicators suggest that BTC is in the midst of a “re-accumulation” phase of bull markets that always proceeds the blow-off top rally, one that brings Bitcoin an order of magnitude or two higher than where it started.
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