Bitcoin (BTC) may have just signaled its return to a bull market, according to fresh analysis using a century-old price prediction method.
In a tweet on Jan. 7, ex-Goldman Sachs analyst Murad Mahmudov channeled the work of Richard Wyckoff to suggest Bitcoin was in the process of a major recovery.
BTC puts in Wyckoff “SOS”
BTC/USD cracked resistance at $7,600 on Monday, surprising punters who considered the levels too difficult to pass under current conditions. At press time, the pair traded at $7,875, having reached $7,980 and gaining 5% on the day.
Wyckoff was the father of a whole new method of analyzing price performance, dubbed the Wyckoff Method. According to Mahmudov, who uploaded a chart to demonstrate Bitcoin’s position, the largest cryptocurrency has already put in a bottom.
Tuesday’s spike to near $8,000, for example, was an “SOS” point for BTC/USD in Wyckoff terms. SOS stands for “sign of strength,” and typically follows a so-called “spring” event which sees a price low point.
After the SOS, a slight retracement called a “back-up” should precede further gains, according to the model.
Accumulation phase ending?
Mahmudov did not comment on the extent to which he personally believed in the validity of the bull scenario, which would reverse a general downtrend for Bitcoin that began in June after reaching nearly $14,000.
Following a late October bounce to $9,500, BTC/USD appeared to bottom out at $6,400 in mid-December, but not everyone is convinced that the floor has come and gone.
In the run-up to Bitcoin’s block reward halving in May, another historically accurate price model, Stock-to-Flow, calls for a price of around $8,300.
Mahmudov is well known for his highly optimistic views on where the Bitcoin price is heading. In August, he said accumulation — also the overarching term for Bitcoin’s current Wyckoff phase — was already happening.
“Don't try to outsmart yourself on short timeframes, zoom out & think big. In my view, BTC is going to $100K per orangecoin,” he summarized at the time.
In a tweet on Jan. 7, […]