A cryptocurrency analyst has disclosed that the recent decline in Bitcoin (BTC) prices has activated a Fischer Transform indicator reminiscent of the 2022 bear market. Despite its lackluster performance in recent weeks, the analyst warns that BTC could face maximum distress ahead, signaling a severe downturn that may persist for the next four months.
Bitcoin Fischer Transform Signal Approaches Past Bear Market Levels
X (previously known as Twitter) crypto analyst Tony Severino has presented a technical analysis showcasing a weekly chart of Bitcoin from the Chicago Mercantile Exchange (CME) with the Fischer Transform indicator plotted below. The analyst notes that this BTC CME indicator has reached levels not seen since the 2022 bear market, hinting at a potentially overextended downward movement.
The Fischer Transform serves as a momentum oscillator intended to identify turning points in price. It aims to signal when prices have reached extremes based on recent price movements. According to Severino, the Fischer Transform indicator for Bitcoin has fallen to -1.96, with the associated trigger line at -1.66—all reading significantly low levels.
Historically, similar indicators have appeared during major market declines, including the notorious bear market in 2022, when Bitcoin prices plummeted from all-time highs to severe lows. The last time the Fischer Transform indicated such lows, BTC was grappling with a prolonged sell-off, facing immense volatility before ultimately bottoming out and recovering prices.
Given these past patterns, Severino is now closely monitoring whether Bitcoin will replicate historical trends and experience a similar bear market decline. At present, BTC is trading at $83,285, down more than 20% from its all-time high of over $104,000 this year.
BTC Price Set for Maximum Pain
In a recent post on X, Severino predicts that Bitcoin is poised for maximum pain in this bullish cycle. The analyst presented a Bitcoin CME weekly chart featuring Bollinger Bands and a Bollinger Band Width indicator of 32.2, indicating a phase of consolidation and potential further decline.
Recently, the Bitcoin price has expanded beyond the Bollinger Bands, signifying a period of heightened volatility. Severino’s chart indicates Bitcoin’s baseline Bollinger Band price at $94,917, which acts as a resistance threshold prior to any substantial price increases.
Severino’s analysis infers that Bitcoin may remain range-bound for 90 to 120 days before making another escape attempt. He suggested the leading cryptocurrency might spend this extended timeframe in a stalemate between bullish and bearish forces.
Analyzing the Bollinger Band chart, the analyst points to a potential drop to the lower Bollinger Band price of $79,633. If the baseline price of $94,917 is surpassed, BTC could reach a new all-time high (ATH) around the upper Bollinger Band price of $110,201. This would signify over a 30% price growth from its current market valuation.
Featured image from Unsplash, chart from Tradingview.com
Editorial Process at bitcoinist is focused on providing thoroughly researched, precise, and unbiased content. We adhere to stringent sourcing standards, and each article undergoes careful review by our team of elite technology experts and seasoned editors. This process guarantees that our content maintains integrity, relevance, and value for our readers.
