Bitcoin exhibits classic bottom formation characteristics across multiple indicators, trading at levels that historically precede significant rallies, according to prominent onchain analyst James Check. However, time – not price – will likely be the most important test for Bitcoin bulls.
“All mean reversion patterns, from technical to onchain, are trading in the lowest formation levels, typically seen after the price capitulation event (of which December 2018 and June 2022 were examples),” Check wrote Tuesday morning as bitcoin plunged to $63,000, seemingly poised to test the February 5 panic low of $60,000.
“Either Bitcoin is dead, that means no going back, and all your models are broken,” Check continued. “Or you should ignore the bears…and quietly establish periodic dollar purchases. [and] stack the sats from now on. »
Although Check admits that it is possible, even likely, that the price of Bitcoin will fall even further from here, it is time for this to play a key role. This is reminiscent of the brutal bear market of 2022. People remember the low price around $15,600 in December of that year, but bitcoin essentially bottomed out six months earlier at around $17,600. The rest was just waiting, then a final wave of liquidity (around the FTX collapse).
“This is literally what a risk-free setup for Bitcoin looks like,” Check concluded. “If you are not actively accumulating bitcoins at this point, then when?”
