A crypto analyst has indicated that investors should brace for a potential Bitcoin (BTC) rally towards the end of the year despite the prevailing bearish sentiment.
Specifically, the analyst known as Stockmoney Lizards highlighted in a July 13 X post that technical analysis points to a bullish outlook for Bitcoin.
The prediction hinges on Bitcoin’s interactions with the lower border of the weekly Bollinger Band, a tool traders frequently use to identify overbought and oversold conditions.
According to Stockmoney Lizards, Bitcoin has touched the lower border of the weekly Bollinger Band three times since November 2022. Historical data from the previous two instances suggest that significant price increases may be imminent.
Can Bitcoin replicate past successes?
The first touch of the lower Bollinger Band in November 2022 led to a significant 100% increase over seven months, with Bitcoin doubling its price. The second touch in June 2023 resulted in an even more impressive 200% surge, tripling Bitcoin’s value over the same period.
In July 2024, Bitcoin touched the lower border of the Bollinger Band for the third time. Although some short-term downside is possible, historical patterns suggest a robust upward movement, indicating a strong year-end finish for Bitcoin.
The expert noted that analysis shows cyclical behavior, with each touch of the lower band historically followed by significant price rallies. The analyst emphasized that this is not a time for investors to be fearful but to recognize the opportunity for potential gains.
“Even if we could see a bit of downside in the short-term, this is not the time to be afraid. Strong year-end finish ahead,” the expert said.
If Bitcoin ends the year strongly, the movement will align with the bullish post-halving rally.
Bitcoin has been aiming to reach another all-time high but has been affected by bearish sentiments, such as the capital inflow from the Mt. Gox repayment and the German government’s selling of Bitcoin.
Bitcoin’s short-term outlook
However, there is some optimism that Bitcoin could make short-term gains, especially considering that the German government has reportedly sold its last Bitcoin holdings. Additionally, the spot Bitcoin exchange-traded fund (ETF) is recording notable capital inflows.
According to the latest data, U.S.-based ETFs saw over $310 million in inflows on July 12, marking their best-performing day since June 5.
Meanwhile, Bitcoin is displaying signs of optimism on the weekly chart. As of the latest update, the pioneering cryptocurrency is firmly holding above the $58,000 mark, trading at $58,406, with a gain of over 2% in the past 24 hours.