During no other time of the year are humans more open to the idea of miracles than now. But what about a crypto Christmas miracle for Bitcoin?
Rather than the miracle being the premise for a holiday flick, it is possible that the appearance of a backtestable technical signal puts in a miracle-esque bottom for the cryptocurrency market.
More Credence For A Santa Claus Rally In Crypto
Dozens of Hallmark-style holiday movies include the world “miracle” in their title. The idea that Santa Claus could hit the homes of children across the entire globe in one night demonstrates the type of hopeful sentiment that can build this time of year.
Related Reading | Could Bitcoin Benefit From A Santa Claus Rally?
Across the cryptocurrency market, investors got the equivalent of coal for Christmas – that is unless a miracle happens. That miracle has a higher than average probability of happening this holiday, according to the Fisher Transform technical indicator on BTCUSD 3-day timeframes.
This technical indicator has only shown such an extreme deviation two other times throughout its history – and when you read at what prices this signal triggered at previously, you won’t help but become more hopeful for a Santa Claus rally over the next several days.
Could a Christmas miracle make investors merry? | Source: BTCUSD on TradingView.com
The Most Extreme Bitcoin Bottom Signal Is Back For Christmas
The Fisher Transform is a technical indicator that was created by John F. Ehlers and, according to Investopedia, “converts prices into a Gaussian normal distribution.” Doing so makes spotting turning points a lot easier. Both extreme readings in standard deviation and the signal itself changing direction present a higher than normal probability point of reversal.
When it comes to objective technical analysis, few technical indicators supply such regularly backtestable results as the Fisher Transform. The version of the Fisher Transform pictured above and below is a custom tool designed by Moe_mentum dubbed the iFish Smooth & Divergence, available on a two-week trial basis or $525 for lifetime use.
Could this signal be another gift for Bitcoin holders? | Source: BTCUSD on TradingView.com
On 3-day BTCUSD charts, the Fisher Transform is showing a potential reversal through turning around at the -2.0 deviation – a point of extremes reached only two other times prior.
The first of the two instances was in October 2011 when Bitcoin was trading at around two bucks per coin. The second was at the bear market bottom in December 2018. Now, some three years later, the extreme level has been reached again, just as the indicator starts turning around.
Related Reading | Bitcoin Falls Flat: Examining A Rare Bull Market Corrective Pattern
The Fisher Transform is an unbounded indicator, meaning that it could very well reverse again and continue to a deeper deviation and extreme. However, doing so would only further increase the likelihood of a reversal further. This makes the Fisher Transform a helpful tool for those who trade using a “mean reversion strategy” and attempt to profit from when prices move to unusual extremes.
Bitcoin price could still make another low while the Fisher Transform fails to do so. At that point, a bullish divergence would be possible and another buy signal potentially generated – again improving the chances of a positive outcome.
Investopedia warns that the potentially lagging indicator could have several limitations. For example, “asset prices are not normally distributed, therefore attempts to normalize prices could be inherently flawed and may not produce reliable signals.”
However, the Fisher Transform remains among the most statistically reliable though backtesting of data, especially when combined with other tools for confirmation. And these statistics show a Christmas crypto miracle could be on the way.
#Bitcoin per D3 — IFS reading one of the historical lows at ( OS) region backtest shows that market was bottomed
D3 at( -2 deviation ) was -> October 2011 @ $2.15 -> 15 Dec 2018 @ $3135https://t.co/125TAgbVlu
— Moe (@Moe_mentum_) December 23, 2021
Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com
Will Ethereum Classic’s Bearish Trend Ever End?
Ethereum Classic (CRYPTO: ETC) is trading higher Monday, moving higher in a crypto market that is trading slightly higher as a whole.
Ethereum Classic has been in a strong downward trend for the last few months and has not yet shown signs it is making a reversal.
Ethereum Classic was up 2.45% at $25.53 at last check.
Ethereum Classic Daily Chart Analysis
Since the break below the $40 support line, Ethereum Classic has been steadily trending down. The strong downward trend can be shown by the …
Original Source: benzinga.com
Why Shopify CEO Tobi Lütke Is Joining the Coinbase Board
Coinbase Global Inc. (NASDAQ: COIN) recently added the CEO of one of the largest e-commerce brands to its board.
Coinbase CEO and co-founder Brian Armstrong said that Lütke is one of the first crypto adopters “through Shopify’s integration with Coinbase …
Source Here: benzinga.com
Bitcoin Bears to Resume Assault? Why BTC Could Crash to $33K
Bitcoin has been trading around its current levels for several days, leading to an apparent shift in sentiment across the crypto market. As BTC’s price trend to the upside after the U.S. Federal Reserve FOMC meeting, there seems to be an increase in optimistic on the crypto market.
Related Reading | TA: Bitcoin Faces Hurdle, Why BTC Could Resume Downtrend
In the short term, our Editorial Director Tony Spilotro has identified a TD Sequential buy signal on the 12-hour chart. As seen below, he highlighted a 13-buy setup with a trend to the downside which has been identified for some market participants as a bear flag.
Source: TonyTrades BTC via Telegram
On this timeframe, larger investors could be “baiting” retail into trading the bear flag. However, the TD Sequential suggest these investors could be entering a trap, as it suggests a short squeeze which could play out as soon as today’s daily close, according to Tony’s analysis.
Data from IntoTheBlock records major resistance level for Bitcoin bulls between $37,500 to $38,500. There are over 822.210 BTC which were purchased by 1.06 million addresses which could be seeking to take profit. A successful break above these levels could push BTC back to the $42,000 price mark.
Source: IntoTheBlock via Ali Martinez (Twitter).
Investment firm QCP Capital supports the short squeeze thesis due to the extend of the current bearish price action. The firm presented two key reasons on why Bitcoin and the crypto market could see a relief in February.
First, the U.S. FED has a “light agenda” for the coming month until 17 March. On this date, the financial institution could announce a decision on interest rates and a change in monetary policy. However, a 25 basis points (bps) seems to be priced in.
This could contribute with a relief in the crypto market, unless the FED decides to implement a more aggressive monetary policy. In any case, March could mark a turning point for Bitcoin and traditional markets, as investors will have their eyes on the FED.
The Long-Term Perspective For Bitcoin, More Downside Likely?
Historically, QCP Capital Noted, February has been a bullish month for Bitcoin which records over 10% in average profits since 2015, with exception of 2020. The bearish price action at the time could have been driven by the COVID-19 pandemic which eventually also contributed with that year’s rally.
However, the firm expects 2022 to be a tough year for the crypto market due to significant macro-economic factors, mainly the actions to be adopted by the U.S. FED. The time at which these changes will be implemented, remain the most important factor and will have an important impact for either bulls or bears. QCP said:
(…) while we think a short-term squeeze higher is likely, we are not overly optimistic for 2022. We remain of the view that crypto prices will remain under pressure and struggle to break the all-time highs this year (…). Any indication of QT (Quantitative Tightnening) starting earlier than expected would be taken very badly by the market.
Related Reading | Go With The FED, Why Bitcoin Could Benefit From Interest Rate Hikes In 2022
As of press time, Bitcoin trades at $37,800 with sideways movement in the past 24 hours.
BTC with some small profits in the daily chart. Source: BTCUSD Tradingview
Original Source: newsbtc.com
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