According to one of its most recognized leading indicators, Bitcoin (BTC) is showing familiar signs of “bottom” behavior at its current price levels.
In a post on X dated April 10, John Bollinger, the creator of the Bollinger Bands volatility metric, offered potentially encouraging news for Bitcoin enthusiasts.
Bollinger Bands %b Indicator Suggests Potential BTC Price Recovery
The latest data from Bollinger Bands suggests that Bitcoin may be establishing a long-term bottom.
Focusing on weekly timeframes, Bollinger highlighted one of his proprietary indicators, known as “%b,” which provides additional insights into market trend reversals.
This %b indicator assesses an asset’s closing price in relation to its Bollinger Band position, using standard deviation around a 20-period simple moving average (SMA).
Among its findings is the “W” bottom formation, where an initial low beneath zero is succeeded by a higher low retest, a pattern that could be developing for BTC/USD.
Bollinger confirmed to his followers on X:
“Classic Bollinger Band W bottom setting up in $BTCUSD. Still needs confirmation.”
BTC/USD 1-week chart with Bollinger Bands data. Source: John Bollinger/X
On both weekly and daily timeframes, Bollinger Bands indicate that a trend shift has not yet occurred.
Data from Cointelegraph Markets Pro and TradingView reveal that the daily chart continues to hover near the lower band, with the middle SMA acting as resistance.
BTC/USD 1-day chart with Bollinger Bands data. Source: Cointelegraph/TradingView
Looking at stocks, which have increasingly correlated with BTC/USD, Jurrien Timmer, director of global macro at Fidelity Investments, reached similar conclusions.
“Looking back at the Bollinger Bands, we’ve shifted from 2 standard deviations above trend to on-trend, and now we’re nearly 2 standard deviations below trend,” he noted in reference to the S&P 500 on April 9.
“Again, it’s oversold but not at a historical extreme.”
Bitcoin May Experience a Bounce Following a 10% Nasdaq Drop
As reported by Cointelegraph, BTC price bottom targets are increasingly focusing around the $70,000 level.
Related: Bitcoin and Stocks React to CPI Data — Will BTC Whales Turn the Tide?
This level is important for various reasons, including its function as a psychological barrier and a liquidity magnet.
Network economist Timothy Peterson, whose Lowest Price Forward metric previously suggested a 95% chance that $69,000 would hold as support, now believes Bitcoin will reverse only after stocks establish their own floor.
“Bitcoin led NASDAQ on this decline. As the asset perceived to be at the upper end of the risk spectrum, I expect NASDAQ to rally first, followed by Bitcoin. Just something to keep an eye on,” he stated this week.
“However, I think NASDAQ has about another -10% to fall.”
Bitcoin vs Nasdaq comparison. Source: Timothy Peterson/X
This article does not constitute investment advice or recommendations. Every investment and trading move carries risk, and readers should conduct their own research before making decisions.
