According to the chart, which is shown below, each cycle follows a familiar sequence of a strong green expansion phase, a transition highlighted as a trend flip, and then a red bearish channel that leads into the final sweep.
Examining the multi-year logarithmic Bitcoin weekly timeframe chart shows that the pattern is visible across the 2014/2015 cycle, the 2018/2019 bottom, and the 2022 cycle low. The current trend flip looks like those previous transitions, and this places Bitcoin once again at a point where the trend has always moved into bearish territory.
According to ChartNerd, this signal has consistently appeared right before the last major downside move in past bear markets. This is why the analyst does not interpret the signal as the beginning of a prolonged collapse. However, it could be seen as a late-stage development, which shows the Bitcoin price is nearing a bottom.
The Gaussian Channel on the price chart shows that the Bitcoin price is on a path to test the channel’s red baseline at $66,895 on the 27-day timeframe, with the lower red support at $44,463. Each prior cycle saw a brief dip to or below that red support line. This means that the Bitcoin price may still face one more period of downside volatility to this range before reversing higher.
Featured image from Unsplash, chart from TradingView
